Golden State Today

California Attorney General Rob Bonta, along with a coalition of attorneys general, has expressed support for a new rule proposed by the Consumer Financial Protection Bureau (CFPB). The rule aims to detect and deter corporate offenders that have violated consumer protection laws. Under this rule, nonbank entities offering consumer financial products must inform the CFPB if they become subject to an order issued by any federal, state, or local regulator or court related to violations of consumer protection laws. This information will be made available 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 will assist the CFPB and other regulatory agencies in identifying repeat offenders and trends in recidivism. It will also aid investors, creditors, business partners, and members of the public in conducting due diligence on financial firms bound by law enforcement orders.

In their letter, the attorneys general commend the rule for providing consumers, government agencies, and market participants with access to information about companies engaged in deceptive or abusive conduct. The registry is expected to enhance the CFPB’s ability to allocate resources more efficiently and prioritize enforcement actions against repeat offenders or entities under multiple orders. State attorneys general will benefit from improved capabilities to identify emerging issues early on and engage in preventive measures.

Attorney General Bonta has consistently worked towards ensuring safe and equitable financial marketplaces in California. In February, he issued letters warning banks and credit unions not supervised by the CFPB that overdraft fees might violate state and federal laws. In January, he supported a proposed rule expanding CFPB's supervisory authority over non-traditional digital payment applications lacking federal regulatory oversight.

Attorney General Bonta joins his counterparts from New York, Colorado, Connecticut, Illinois, Maryland, Minnesota, Oregon, Pennsylvania, and Vermont in supporting this initiative.

A copy of their letter can be found here.

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