California Attorney General Rob Bonta, alongside a coalition of attorneys general, has endorsed a new rule proposed by the Consumer Financial Protection Bureau (CFPB) aimed at identifying and deterring corporate offenders who violate consumer protection laws. The rule mandates that nonbank entities offering consumer financial products must notify the CFPB if they become subject to an order issued by federal, state, or local regulators or courts for violations of consumer protection laws. This information will be made accessible through a searchable online registry.
“It’s an age-old adage, but it’s true. Knowledge is power. We cannot efficiently fight injustice — or stand up for those who are taken advantage of or harmed — when we do not have access to current information,” said Attorney General Bonta. “As technology and innovation grow, we must keep up with it. Creating a transparent and accessible registry where agencies and consumers alike can vet nonbank financial services companies is a step to holding those who break the law accountable. I thank the CFPB for this timely rule and look forward to having another tool in the toolbox to help protect the financial health of Californians.”
Currently, there is no common database tracking all public orders issued against financial services companies that violate consumer protection laws. The proposed registry aims to fill this gap by helping the CFPB and other regulatory agencies identify repeat offenders and recidivism trends. It will also assist investors, creditors, business partners, and members of the public in conducting due diligence on financial firms bound by law enforcement orders.
In their letter supporting the rule, the attorneys general commend its potential to provide consumers, government agencies, and market participants with crucial information about companies engaged in deceptive or abusive conduct. The registry is expected to enhance the CFPB’s ability to allocate resources more effectively and prioritize enforcement actions against repeat offenders.
Attorney General Bonta has consistently advocated for safe and equitable financial marketplaces in California. In February, he issued letters warning banks and credit unions not under CFPB supervision that overdraft fees might violate state and federal laws. Additionally, in January, he supported expanding CFPB's supervisory authority over non-traditional digital payment applications.
Joining Attorney General Bonta in submitting this letter are attorneys general from New York, Colorado, Connecticut, Illinois, Maryland, Minnesota, Oregon, Pennsylvania, and Vermont.
A copy of the letter can be found here.