With the rapid rise of nonbank financial product and service companies in an everchanging marketplace, there is growing concern that nonbanks will evade federal oversight. To keep pace with these changes, the Consumer Financial Protection Bureau (CFPB) announced that it will expand its oversight of nonbank entities, including nonbanks that brand themselves as “fintechs.”
CFPB Director Rohit Chopra intends to hold nonbanks to the same standards to which banks are held. To level the playing field for banks and nonbanks, the CFPB will conduct examinations of nonbank financial companies that the CFPB has “reasonable cause” to determine are posing risks to consumers. Mr. Chopra seeks to “stop harm before it spreads.”
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