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CFPB’s Broad Powers

While entities like banks and credit unions were already subject to federal regulatory authority from other agencies, Congress gave the Consumer Financial Protection Bureau the authority to regulate non-bank entities such as credit reporting agencies, payday lenders, private mortgage lenders and servicers, debt collectors, and private student loan companies.

The scope of the CFPB’s jurisdiction over financial industries remains one of the most controversial aspects of the agency. Though the Dodd-Frank legislation setting up the CFPB clearly enumerated many industries and financial products subject to CFPB regulation, the law’s language left many financial products in a gray area. It will be up to the CFPB itself to determine whether it has the authority to regulate certain products under the bureau’s interpretation of Dodd-Frank. Therefore, a great deal of uncertainty surrounds the full scope of the agency’s power.

Financial services that fall under CFPB jurisdiction include:

  • Deposit taking
  • Mortgages
  • Credit cards and other extensions of credit
  • Loan servicing
  • Check guaranteeing
  • Collection of consumer report data
  • Debt collection associated with consumer financial products and services
  • Real estate settlement
  • Payday loans
  • Money transmitting
  • Financial data processing

Certain industries are explicitly exempt from CFPB regulation, including real estate brokers, real estate agents, sellers of manufactured and mobile homes, car dealers, and accountants. However, these industries can be subject to CFPB regulation if they extend credit, sell or offer to sell to consumers financial products, or engage in any activities that fall under CFPB jurisdiction.

For example, when car dealers “sell or offer to sell consumer financial products or services unrelated to the sale, financing, leasing, rental, repair, refurbishment, maintenance, or other servicing of motor vehicles, motor vehicle parts, or any related or ancillary product or services” they fall under CFPB jurisdiction.

Other industries, like retailers, are generally exempt from CFPB regulation, but could fall under CFPB authority if the entity “regularly extends credit and the credit is subject to a finance charge” and is “engaged significantly in offering or providing consumer financial products or services.”