“The bureau will as a substitute proceed to focus its enforcement and supervision actions on urgent threats to customers,” the CFPB mentioned in a press release.
Timeline of change
The proposed rule, launched in late 2022, requires nonbank entities to report public company enforcement actions and courtroom orders for inclusion in a nonbank registration system (NBR) – a publicly out there on-line database. The ultimate rule was printed in July 2024, with an implementation date of Sept. 16, 2024.
Underneath the unique timeline, smaller nonbanks supervised by the CFPB had been required to register by April 14, 2025, with all lined nonbanks anticipated to conform by July 14, 2025.
The principle criticism from mortgage commerce teams centered on what they characterised because the rule’s redundancy. Impartial mortgage banks (IMBs) already report related data by way of the Nationwide Multistate Licensing System and Registry (NMLS).
The NMLS MU1 kinds already require IMBs to reveal all state or federal regulatory actions — in addition to sure courtroom actions — from the previous 10 years. IMBs that fail to adjust to NMLS reporting guidelines are topic to fines.
Trade response
Mortgage commerce teams applauded the freeze on the nonbank registry rule.
The Neighborhood Residence Lenders of America (CHLA), a nationwide non-profit affiliation representing small- and mid-sized group mortgage lenders, mentioned the latest choice gives “regulatory aid for smaller lenders from duplicative Registry necessities.”
“CHLA known as for such motion in our February letter to the CFPB, as a part of an agenda of regulatory streamlining so mortgage lenders can think about their fundamental enterprise — originating loans,” the commerce group mentioned in a press release.
One other commerce group, the Mortgage Bankers Affiliation (MBA), despatched a letter to the CFPB in January requesting a delay within the compliance deadlines. At that time, MBA president and CEO Bob Broeksmit attacked the rule, saying it was “expensive and duplicative.”
Concerning the present freezing, MBA’s senior vice chairman of residential coverage and strategic business engagement, Pete Mills, mentioned in a press release that the CFPB “may have as a substitute added its enforcement data on mortgage corporations to the already complete consumer-facing database maintained by the Convention of State Financial institution Supervisors’ NMLS Client Entry portal.”
“MBA is monitoring the CFPB’s subsequent steps and can advocate for them to contemplate issuing an NPR to rescind the regulation,” Mills mentioned.