The CFPB will pause its proposed regulation requiring nonbank entities to report public enforcement actions for a new registration system, emphasizing priorities on consumer threats. Criticism from mortgage industry groups highlighted the redundancy of the new rule given existing reporting through the NMLS. Smaller lenders, represented by CHLA, welcomed the regulatory relief from duplicative requirements, enabling them to focus on loan origination. Meanwhile, the Mortgage Bankers Association also requested a delay citing the costs associated with compliance. The final rule was slated for implementation in September 2024, but its future remains uncertain amid industry feedback.
The CFPB has decided to pause its proposed rule that would require nonbank entities to report enforcement actions, focusing instead on pressing consumer threats.
Critics argue the proposed nonbank registration system is redundant since similar information is already reported through the NMLS, subject to fines for non-compliance.
Trade groups like CHLA and MBA have voiced support for the freeze, citing regulatory relief for smaller lenders and expressing concerns over compliance costs and duplicative requirements.
The final rule, expected to be implemented on September 16, 2024, faced backlash from the mortgage industry for its potential impact on operational focus and resources.
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