CFPB Rescinds Nonbank Public Order Registry Rule and Withdraws Proposed Rule on Nonbank Registry for Contract Terms: Register No More!

Tomorrow, October 29, 2025, the CFPB will publish in the Federal Register a final rule rescinding last year’s new Nonbank Registry Rule, which I wrote about here.  The Nonbank Registry Rule required certain nonbanks to report state agency enforcement orders to a CFPB registry that would be publicly available, and for certain companies have an executive attest to ongoing compliance with such orders.  The rescission will be effective upon publication in the Federal Register tomorrow.

The CFPB stated that its rescission of the original rule, which was issued by former Director Chopra, was “based on concerns that the costs the rule imposes on regulated entities, which may be passed on to consumers, are not justified by the speculative and unquantified benefits to consumers “ that former Director Chopra used to support the rule.  In addition, the CFPB cited “the cost to the Bureau of maintaining the registration system,” and that the CFPB believes the registry was “not a necessary tool to effectively monitor and reduce potential risks to consumers.”

As I wrote about here, the CFPB announced in April 2025 that it would not enforce the rule and was considering rescinding it.  Then in May 2025, the CFPB published a proposal to rescind the rule, in which it requested comments “non-speculative and methodologically rigorous analysis of the purported benefits and costs that were identified when the rule was promulgated.”

The CFPB noted in this final rule that comments from most industry associations and the Conference of State Bank Supervisors (an association of state banking and financial regulators) supported rescission of the final rule, but that two nonprofit organization commenters opposed the rescission and raised concerns that the rule promoted transparency, enhanced competition and consumer choice, helped the public identify repeat offenders and patterns of misconduct, and would allowing recidivism to increase.  The CFPB responded to this opposition stating that the commenters provided “no quantifiable support for the claim that the NBR Rule promotes or enhances transparency, competition, and consumer choice.”  Regarding the worries about recidivism, the CFPB responded that “recidivism is not hidden from enforcement agencies or the public” because the orders are already publicly available.  The CFPB stated that no commenters responded to its request in the proposed rule for “non-speculative and methodologically rigorous analysis” of the rule’s benefits.  In addition, the CFPB criticized many aspects of the original final rule’s analysis of the rule’s benefits, such as its focus on the risk of recidivism.  The CFPB stated that former Director Chopra’s rule “provided no data on the prevalence of public agency and court orders against covered nonbanks, and only vague, limited information about the prevalence of recidivism” and “did not conclude that recidivism by nonbank covered persons was widespread or that the risks it poses are notably greater than other risks to an extent that would justify the costs of the rule.”

In addition, the CFPB will publish tomorrow in the Federal Register a formal withdrawal of its 2023 proposed rule (which I wrote about here) under former Director Chopra that would have required most nonbanks to register with the CFPB information about their use of certain terms and conditions in form contracts, which the CFPB would have made publicly available.  Similar to the nonbank registry on public orders, the CFPB cited as the reason for this withdrawal “the significant costs of the proposed registration and publication system,” which “are not justified by their uncertain and speculative benefits.”

These are great moves by the CFPB.  These registries would have been unnecessarily burdensome, and exposed companies to substantial new legal and reputational risk.  We are still waiting for other significant rulemakings for the mortgage industry, including the potential rescission of the LO Comp rule and the CFPB’s discretionary mortgage servicing rules (the loss mitigation requirements), which I’ve written about here.  We will be on the lookout for those important rulemakings and update you when they come out. But for now, these two actions appear to be a good sign that the CFPB is thinking these issues through carefully and rationally, and is willing to make the right moves.

Please email me at rich@garrishorn.com if you would like to discuss any of the issues in this post or any other issues.