Rep. Andy Ogles, R-Tenn., on August 30, 2024 introduced in the House of Representatives a resolution under the Congressional Review Act (CRA) that would nullify the CFPB’s final nonbank registry rule.

The rule, issued in June, will require certain nonbank entities to register certain covered enforcement or court orders.  Additionally, CFPB-supervised covered nonbanks must comply with ongoing attestation reporting requirements on their compliance with such orders. The rule is effective on September 16, 2024, with registration available beginning on October 16, 2024 and then mandatory pursuant to a tiered implementation approach, with the deadlines based on the nature of the entity that is required to register.

Under the Congressional Review Act, Congress may nullify federal agency rules within a prescribed period after they are adopted. The resolution doing so would have to pass the House and Senate and would have to be signed by the President.  Here President Biden, a supporter of the CFPB’s regulatory regime, would likely veto the resolution. (In December 2023, President Biden vetoed legislation adopted under the CRA to override the CFPB’s final Section 1071 small business lending rule.)

In May, as the CFPB was finalizing the rule, Ogles and 11 of his House Republican colleagues sent a letter to CFPB Director Rohit Chopra contending that the CFPB did not have the authority to “promulgate a registration rulemaking this robust.”

The Republicans, all members of the House Financial Services Committee, asserted that “When Congress intends to create a database, it explicitly and clearly does so. Furthermore, the Bureau explicitly cannot require financial institutions to register.”

Somewhat surprisingly, to date no trade association or covered nonbank entity has filed a lawsuit challenging the validity of the rule.

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