Banking and Finance Law Daily Wrap Up, CONSUMER FINANCIAL PROTECTION BUREAU—CFPB’s plan to revise ‘larger participant’ rules in four markets receives pushback, (Sep 24, 2025)

By Steven D. Cole, J.D.

The ABA and a collection of state attorneys general have urged the Bureau to maintain its current level of supervision in the markets for automobile financing, consumer debt collection, consumer reporting, and international money transfer.

On Aug. 8, 2025, the Consumer Financial Protection Bureau published in the Federal Register four Advance Notices of Proposed Rulemaking (ANPRs), seeking comment regarding whether to revise its definitions of “larger participant” in the markets for automobile financing, consumer debt collection, consumer reporting, and international money transfer (see Banking and Finance Law Daily, Aug. 7, 2025). Concerned that the benefits of the current thresholds may not justify the compliance burdens for many of the entities that are currently considered larger participants in these markets, and that the current thresholds may be diverting limited CFPB resources to determine who may be subject to its supervisory authority, the Bureau has proposed raising the thresholds in each market. The American Bankers Association (ABA) submitted comment letters on Sept. 22, 2025, exhorting the CFPB to maintain its “robust federal supervision” over these markets by not raising the larger participant thresholds. Attorneys general (AGs) for 18 states and the District of Columbia also jointly submitted comment letters, similarly urging the CFPB to not take action on its proposals.

In each of the ABA’s four comment letters relating to automobile financing, debt collection, consumer reporting, and international money transfer, the ABA reminded the CFPB that the Bureau was established by Congress after the financial crisis of 2008, under the authority vested in it by the Dodd-Frank Act in 2010, in order to ensure compliance with consumer protection laws. According to the ABA, this is best achieved through “robust federal supervision,” cautioning that materially scaling back the CFPB’s supervision of larger participants in the automobile financing, consumer debt collection, consumer reporting, and international money transfer markets would be a mistake: “Supervision encourages entities to expend the resources to develop the practices, procedures, training and other components of an effective compliance management system that promotes the entity’s compliance with consumer protection laws…. Without supervision, nonbanks may operate without the consumer protections that banks are required to uphold.”

The letters then address the substantive reasons as to why the ABA believes that the current thresholds for each of these markets should be retained, and its concerns should the CFPB move forward with its proposals to raise these thresholds, thereby limiting the number of market participants over which it exercises supervision.

The AGs, in their four letters to the CFPB relating to automobile financing, debt collection, consumer reporting, and international money transfer, explained in detail the reasons why they believe that the Bureau should not modify the larger participant thresholds for these four markets. Generally, their objections to the Bureau’s proposals, as stated in the ANPRs, fall under three categories.

First, the AGs say that increasing the larger participant thresholds is inconsistent with the CFPB’s statutory obligation to maintain a risk-based supervision program in the automobile financing, consumer debt collection, and consumer reporting markets, as reducing the number of supervised entities in each of these markets would be an abdication of its duty. The AGs also contend that the proposal regarding the international money transfer market cannot be squared with its consistent findings of legal noncompliance in this market.

Second, according to the AGs, the costs to each industry from the current thresholds are not unduly burdensome. They maintain that industry legal compliance obligations and their associated costs arise from the substantive consumer protection statutes passed by Congress and the regulations promulgated to implement those statutes, not whether the entities are supervised by the CFPB. Furthermore, the Bureau has estimated that the cost of compliance with an average supervisory examination is approximately $27,000, and the possibility of incurring an examination compliance cost of this amount over a period of several years is, the AGs argue, not unduly burdensome for such companies and entities. Moreover, the entities currently subject to the CFPB’s oversight as larger participants do not incur significant costs associated with “monitoring larger participant status,” as the threshold test in each market sets a clear standard, and entities have records sufficient to show whether they meet that threshold.

Third, the AGs maintain that the other justifications listed in the ANPRs—such as unduly diverting CFPB resources to determine which entities to examine—are without merit.

In a Sept. 22, 2025, press release, California Attorney General Rob Bonta characterized the Bureau’s proposals as an attempt “to skirt its obligation under federal law to protect American consumers.” According to the release, “[t]he Trump Administration’s proposals would limit the CFPB’s oversight to as few as six consumer reporting companies, 11 debt collectors, four international money transfer providers, and five auto finance companies…, threatening catastrophic harm to hardworking families and consumer financial markets nationwide.”

Companies: American Bankers Association

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