CFPB Issues Final Rule Removing Requirement for State Officials to Notify CFPB of State Actions Enforcing the CFPA

On May 21, the Consumer Financial Protection Bureau (CFPB) published a final rule rescinding 12 CFR 1082 that required state officials to notify the CFPB of any court action or administrative or regulatory proceeding against covered persons for violations of the Consumer Financial Protection Act (CFPA). Previously, state officials were required to notify the CFPB of any action, including a description of the involved parties and facts underlying the proceeding, that the state official brought against financial institutions for CFPA violations. The final rule will take effect on July 21, 2025, unless the CFPB receives significant and adverse comments to the final rule by June 20, 2025.

On May 20, the Federal Deposit Insurance Corporation (FDIC) released its Restoration Plan Semiannual Update. When the Deposit Insurance Fund (DIF) reserve ratio falls below the statutory minimum of 1.35%, or is expected to fall below that minimum within six months, the Federal Deposit Insurance Act requires the FDIC’s Board of Directors to develop a restoration plan to restore the DIF to at least 1.35% within eight years. In the latter half of 2024, an increase in the DIF balance, coupled with below-average growth in insured deposits, led to a 6-basis point increase in the reserve ratio from 1.22% on June 30, 2024 to 1.28% on December 31, 2024. Because of this increase, FDIC staff expect that the reserve ratio is “likely” to reach the statutory minimum by the end of 2025, placing the timeline ahead of the statutory deadline of September 30, 2028. Accordingly, the FDIC staff does not currently recommend changes to the restoration plan.

On May 13, the CFPB proposed to rescind its July 8, 2024 “Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders” rule (the NBR Rule). The NBR Rule requires certain types of nonbank covered persons subject to certain final public orders of a government agency to report to a CFPB registry the existence of such orders, and related information, and to file annual compliance reports. The rescission is proposed on the basis that the NBR Rule is unnecessary and imposes unjustified costs on regulated entities, which may be passed on to consumers. Comments must be received on or before June 13, 2025.