The Consumer Financial Protection Bureau (CFPB) announced earlier this week that it intends to leverage a largely unused legal provision to examine nonbank financial companies and seeks comments on updated procedures. The CFPB believes using this inactive authority will enable them to hold nonbanks to the same standards as banks, and allow the CFPB to be “agile and supervise entities that may be fast-growing or are in markets outside the existing nonbank supervision program.” The types of nonbank categories include:
- Nonbank entities in the mortgage, private student loan, and payday loan industries,
- Larger participants in other nonbank markets for consumer financial products and services, and
- Nonbanks whose activities the CFPB has reasonable cause to determine pose risks to consumers.
From an AML perspective, CCO’s of FinTechs should proactively look at their compliance platforms to identifying requirements that may have not been previously included, such risk ranking customers and performing enhanced due diligence for higher risk customers.