Over the past five weeks, the Consumer Financial Protection Bureau (CFPB) has signaled a continued pullback in its regulatory enforcement under the current administration. We anticipate state lawmakers will continue to take a more assertive stance in consumer-finance oversight as legislative sessions open in January 2026.
1. Withdrawn: Proposed Rule Creating Registry of Supervised Nonbanks
This proposed rule would have required some covered nonbanks, including auto lenders subject to bureau supervision, to report the use of certain lawful terms and conditions in form contracts. The scope of the rule included form contracts for add-ons purchased by lenders from auto dealers. It would also have required reporting of court and/or arbitrator decisions addressing the enforceability of those terms.
The terms and conditions in question are those “that seek to waive consumer rights or other legal protections or limit the ability of consumers to enforce or exercise their rights.”
Examples of terms and conditions include:
- Waivers of claims a consumer can bring in a legal action;
- Limits on the company’s liability to a consumer;
- Limits on the consumer’s ability to bring a legal action by dictating the time frame, forum, or venue for a consumer to bring a legal action;
- Limits on the ability of a consumer to bring or participate in collective legal actions such as class actions;
- Limits on the ability of the consumer to complain or post reviews;
- Certain other waivers of consumer rights or other legal protections;
- Arbitration agreements.
The proposed rule would also have allowed the CFPB to publish the collected data in a public-facing registry.
What was the CFPB’s Rationale for Withdrawal?
In announcing its withdrawal, the bureau stated that the benefits of the proposal were “uncertain and speculative” and did not justify the associated costs. Current CFPB leadership noted that the 2023 proposal did not establish that the registration requirement would deter the use of such terms or quantify any potential benefit. The bureau further concluded that consumer behavior was unlikely to shift meaningfully in response to a registry and that publication of the information could generate confusion about the legitimacy of lawful contracts, potentially harming lenders’ reputation without a clear policy payoff.
2. Rescinded: Registry of Nonbank Covered Persons
Subject to Certain Agency and Court Orders
What is the Registry of Nonbank Covered Persons Rule?
This rule, which obligated most nonbanks to notify the bureau if they received a final court or agency order related to the violation of certain consumer protection laws and required nonbanks supervised by the bureau to submit annual compliance reports, was finalized in July 2024 and went into effect three months later.
The bureau had intended to collect the data in a registry and publish it to increase consumer awareness of covered nonbanks that repeatedly broke consumer protection laws, deter such violations via publication of offenses in a registry, and use the data to monitor trends.
What was the CFPB’s Rationale for Rescinding the Final Rule?
In its comments, the current CFPB determined that its predecessor did not adequately establish the presence of widespread, repetitive, and dangerous violations of consumer protection laws by nonbanks. In addition, it noted that other regulators can and do track nonbanks for compliance with their own orders, and consumers are unlikely to use the registry or change their behavior as a result of it. Moreover, the current bureau asserted that its predecessor underestimated or failed to consider the costs of compliance, including a “chilling effect” on the willingness of compliance professionals to take roles in supervised nonbanks if they may be liable for their employer’s unscrupulous behavior.
3. Rescinded: 2022 and 2023 CFPB Rules of Practice
for Adjudication Proceedings
In late October, the bureau formally rescinded several amendments made in 2022 and 2023 to its adjudication procedures. The bureau determined that key elements of those earlier revisions centralized too much authority in the CFPB director and could lead to inconsistent or less transparent outcomes in administrative enforcement actions.
The most significant reversals involve provisions that allowed the bureau, rather than an administrative law judge, to rule on motions to dismiss and motions for summary judgment. While the director retains final authority to issue decisions and orders, the CFPB concluded that expanding the director’s role earlier in the process increased the potential for conflicts and reduced procedural consistency, particularly in matters where the director had a role in previous enforcement actions.
Two additional amendments were rescinded for similar reasons. One had given the director the ability to divide hearings into multiple stages, a structure the bureau now views as inefficient and susceptible to bias. The second required parties to “exhaust” issues throughout the hearing process, a requirement the CFPB determined was duplicative of existing administrative law principles and created additional opportunities for discretionary overreach.
Most other targeted amendments were also revoked on the grounds that they were technical or unnecessary. However, the CFPB retained changes related to updated nomenclature, the use of electronic documents for inspection and copying, and a revised method for calculating deadlines.
Summary of the Rescissions
Overall, the bureau’s action marks a shift toward reinforcing the role of administrative law judges in CFPB proceedings, reduced reporting requirements and standardizing procedures to support consistency and due-process expectations.
The information provided in this post does not, and is not intended to, constitute legal advice; instead, all information, content, and materials referenced are for general informational purposes only. Readers should contact their attorney to obtain advice with respect to any particular legal matter.
