WASHINGTON (Legal Newsline) - Among the Biden-era rules that should now be torn down, business groups say, is one that allowed the Consumer Financial Protection Bureau to "name and shame" companies on a public registry.
The groups wrote President Trump's new acting CFPB director Scott Bessent, who also serves as Secretary of the Treasury, to urge him to rescind a rule implemented last year by Biden's CFPB, then under the leadership of Rohit Chopra.
Under the rule, some nonbanks must report final public orders obtained or issued by a government agency that involve consumer financial products or services. The CFPB then puts that information in a public registry.
When it was proposed, the rule was criticized by the U.S. Small Business Administration's Office of Advocacy, which argued the reputations of small businesses could be harmed by simply reporting settlements from up to 10 years priors in which they admitted no liability.
Advocacy also said the rule wasn't needed, as most of that information is collected by the Conference of State Bank Supervisors.
"Moreover, consumers can research a company on the internet and learn about a company's business practices," Advocacy wrote then. "The information is not limited to court orders. There are several websites that allow consumers to read reviews about a business' practices.
"If the information is already available, the system that the CFPB is proposing is an unnecessary action that may be burdensome for small businesses."
Nonetheless, the CFPB finalized the order in June. The recent letter urging it be struck came from eight trade groups and the U.S. Chamber of Commerce. Legal Newsline is owned by the U.S. Chamber Institute for Legal Reform.
Among the groups signing the letter is the American Financial Services Association, which last month wrote the CFPB to say its members are confused by the CFPB's rules and its rulemaking procedure.
Since its inception, critics have complained the CFPB has gone above and beyond what it was intended to do - sometimes harming the very consumers it is supposed to protect.
Like other Biden agencies, the CFPB went through the rulemaking process to implement nationwide changes for businesses without needing approval from Congress. One such rule capped late charges on credit card payments at $8, leading to a court injunction against it.
House Financial Services Committee chair Andy Barr last year claimed the CFPB has gone "rogue," and AFSA has warned that new rules targeting "risky" loans do not include a description of what those would be.
A 2023 policy statement on abusive acts or practices is "so vague and unwieldy, it is impossible to implement," AFSA wrote.
As for the nonbank registry rule, AFSA and the other groups are worried it will be used to shame highly regulated entities rather than act as a useful monitoring tool.
"The U.S. consumer financial services market is one of the most highly regulated in the world and services millions of Americans well, enabling them to achieve their economic goals," the letter to Secretary Bessent says.
"The members of our organizations invest substantial resources in ensuring compliance at the federal and state levels.
"Unfortunately, the CFPB’s registry will unnecessarily increase compliance costs for consumer financial products while providing no additional consumer protections or useful information for Americans."