The U.S. Consumer Financial Protection Bureau (CFPB) has officially eliminated its registry for companies found to have violated consumer financial laws. According to a government notice released on Tuesday, the agency determined that the registry’s costs surpassed any potential benefits to the public. This decision follows a proposal made in May and aligns with broader efforts to reduce the CFPB’s regulatory authority.
The now-defunct registry, initially intended to identify and deter repeat offenders, was introduced by the previous administration. However, the CFPB’s recent cost-benefit analysis concluded that the registry largely duplicated an existing multi-state system. The agency estimates that discontinuing the registry will save approximately $360 per company. The CFPB is a U.S. government agency responsible for consumer protection in the financial sector. It aims to ensure that banks, lenders, and other financial institutions treat consumers fairly.
Industry organisations and state regulators have voiced their support for the CFPB’s decision, citing similar reasons regarding duplication and cost inefficiency. Conversely, consumer advocacy groups, such as Better Markets, have expressed concerns. They argue that with a significant portion of the lending market now controlled by non-bank entities, the absence of the registry could increase risks to consumers and financial stability, while also diminishing the deterrent effect on repeat offenders.
The announcement coincides with the CFPB’s recent reversal of a Biden-era policy that encouraged states to prohibit medical debts from appearing on consumer credit records. In July, with the CFPB’s backing, a court also struck down regulations that barred medical debt from consumer reports.
