Is this a Brave New World? Implications of the CFPB and the FTC for Nonbank Financial Services Providers

The Dodd-Frank Act contemplates the creation of a new Consumer Financial Protection Bureau (CFPB) within the Federal Reserve. CFPB would be responsible for consumer protection over financial products and services offered by both banks and nonbanks, including mortgage lenders, captive finance companies, credit card issuers, payday lenders, remittance processors, and anyone else that offers to finance retail goods or services. Historically, the banks covered by the Act have been supervised and examined for consumer compliance, however, nonbanks will now be under a new federal regulatory regime. Also under the Act, the Federal Trade Commission (FTC) will continue to play an important role in regulating and enforcing the laws with respect to nonbank financial institutions, in coordination with CFPB.

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