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CFPB Launches Database to Track Repeat Offenders

— June 17, 2024

The agency’s database will monitor for repeat offenders among nonbank financial companies to enhance accountability.

The Consumer Financial Protection Bureau (CFPB) has announced the creation of a public database to identify nonbank financial companies caught violating consumer laws, aiming to catch and deter corporate repeat offenders, thus deterring recidivism. The new regulations require debt collectors, mortgage and payday lenders, credit reporting companies, and other nonbank financial services companies, many of which are not registered or licensed, to proactively inform the agency of any previous actions taken against them at the federal, state, and local levels.

“Too many American families and businesses have been harmed by repeat offenders in a rinse-repeat cycle of illegal activity where bad actors see fines and penalties as just the cost of doing business,” said CFPB Director Rohit Chopra when the agency’s move was announced. “The registry is going to help the CFPB and other law enforcement agencies monitor and track repeat offenders to better hold them accountable if they break the law.”

The public database, which was first proposed in late 2022, continues the CFPB’s push to fight corporate recidivism following the creation that same year of a Repeat Offender Unit within its supervision program to monitor these issues. It will be partly available to view online with the purpose of allowing state attorneys general and other regulators, as well as investors and creditors performing due diligence, to readily reference it.

The CFPB’s Repeat Offender Unit is a specialized team tasked with overseeing businesses that have been subject to CFPB law enforcement orders. The unit was established with a focus on monitoring and ensuring compliance with these orders, particularly by senior management and the board of directors, to prevent repeat offenses.

CFPB Launches Database to Track Repeat Offenders
Photo by Danny Meneses from Pexels

CFPB officials said they modified their original proposal in light of some industry feedback. For example, companies that already have enforcement actions recorded in a nationwide licensing system for nonbank mortgage lenders will be able to use a simplified filing process. However, trade organizations criticized the provisions that appear to remain in the new regulation, including a requirement for senior executives to attest in writing that their entity is in compliance with existing court orders and enforcement actions.

The CFPB’s new registry represents a significant step towards enhancing consumer protection and holding corporations accountable for illegal activities. By detecting and deterring corporate offenders, it will help ensure that financial firms comply with consumer laws and do not engage in harmful conduct that could harm the public. Consumers and employees alike are encouraged to report any violations they witness, as the CFPB continues its efforts to promote a fair and transparent financial marketplace.

This database is an important tool in the CFPB’s ongoing efforts to prevent financial harm to consumers. Through the registry, the CFPB will be able to identify patterns of illegal behavior among nonbank financial companies and take swift action to stop illegal practices and hold wrongdoers accountable. The CFPB’s emphasis on corporate recidivism reflects its commitment to protecting consumers from financial harm. By establishing the Repeat Offender Unit and implementing the new registry, the CFPB is sending a clear message to companies that choose to disregard consumer protection laws – there will be very real consequences for doing so.


CFPB Creates Registry to Detect Corporate Repeat Offenders

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