Letter in Response to Proposed Rule for a Registry of Supervised Nonbanks that Use Form Contracts to Impose Terms and Conditions that Seek to Waive or Limit Consumer Legal Protections (Docket No. CFPB-2023-0002)

Abstract

In a letter, the Student Borrower Protection Center (SBPC) responds to the Consumer Financial Protection Bureau’s (CFPB) proposal to create a registry of covered nonbank entities that use terms and conditions in non-negotiable form contracts to restrict consumers’ rights and protections under the law. SBPC’s letter details how a range of consumer finance companies that engage with students have used craftily designed agreement provisions to prevent members of the public from seeking justice in the courts for predatory conduct, accessing key anti-fraud safeguards, speaking out about bad products and experiences, and more. Against this backdrop, SBPC notes that the CFPB’s proposed registry would help promote consumer protection, facilitate the CFPB and its partners’ work to hold bad actors accountable, and further the efficient functioning of vital retail financial markets. In addition, SBPC outlines various modifications that the CFPB can and should make to ensure that the registry is as robust as possible, and to restore the public’s understanding that the diminishment of their rights should be seen as grave and unusual.

Keywords: bank, cfpb, consumer protection, finance

JEL Classification: i22, i28