The Consumer Financial Protection Bureau has yet to publish its proposed ‘Larger Participant’ rule, announced on September 17, in the Federal Register, a move that would kick off a 60-day period for public feedback.
“There’s not any standard amount of time, we’ve seen that the CFPB will announce a proposed rule and that some number of days will pass before it’s published,” Attorney John Redding, Partner at Buckley Sander LLP, told Auto Finance News. “It’s not unusual. We’re expecting it any day now.”
Under the Administrative Procedures Act, any government agency proposing a new rule is required to put it out for public comment to give industry consumers and others the opportunity to express their thoughts or concerns on what is being proposed, before the final rule is issued, according to Redding.
“The reason that’s important is that those comments can then impact or effect what the final rule looks like,” Redding said. “So, for instance, they may make an adjustment to what is included or excluded from the definition of ‘automobile.’ They may make a change as to the threshold: is it 10,000 accounts or is it 20,000 accounts, or is it 50,000?”
If passed, the proposed rule would redefine what the bureau considers to be a larger participant in the auto finance industry. Currently the CFPB is proposing that larger nonbank auto finance companies that make, acquire, or refinance at least 10,000 or more loans or leases in a year be brought under the watchful eye of the CFPB. However, the public comment period opens the door for possible revision.
“I anticipate we’ll see comments about the 10,000 accounts threshold,” Redding said. “I think we’re going to see a number of institutions comment that by setting the threshold as low as they have, they are likely to pick up companies that would otherwise qualify as small businesses, as defined under the small business administration.”
However, according to Redding, there is no way to predict exactly what impact the comments will have on the final outcome, once the bureau’s proposal is published.
“There are times that the comments will result in meaningful changes, there are times when it will result in very minor changes,” Redding said. “And there are times it will result in no changes.”Like This Post