On August 8, 2025, the Consumer Financial Protection Bureau ("CFPB") issued four advance notices of proposed rulemaking ("ANPR") inviting comments on whether it should substantially reduce the number of nonbank companies the CFPB supervises in the auto finance, international money transfer, debt collection, and consumer credit reporting markets. An agency spokesperson told Law 360, "As part of President Trump's overhaul of this abusive agency, 'Larger Participant' regulations are open for re-examining after more than a decade. We are giving the power back to the American people and asking them to tell us how these regulations impact their daily lives."
Section 1024 of the Consumer Financial Protection Act gives the CFPB supervisory authority over all nonbank covered persons offering the following consumer financial products or services: (1) origination, brokerage, or servicing of consumer loans secured by real estate, and related mortgage loan modification or foreclosure relief services; (2) private education loans; and (3) payday loans. The Bureau further has supervisory authority over ''larger participant[s] of a market for other consumer financial products or services, as defined by rule[s]'' the CFPB issues. To date, the Bureau has issued six rules defining larger participants of markets for consumer financial products and services for purposes of CFPA section 1024(a)(1)(B). It did not invite comments on its larger participant rule for student loan servicers and its larger participant rule for general-use digital payment application providers, which was nullified under the Congressional Review Act, as we've previously discussed.
In general, the Bureau is 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 [each particular] market." The following summary of the notices highlights how the CFPB is considering the alteration of the definition of "larger participant" in the four specific markets, the implications of those changes, and the benefits the Bureau hopes to observe as a result.
Consumer Reporting Market
The Bureau published its first larger participant rule, the Consumer Reporting Larger Participant Rule, on July 20, 2012. The final rule established that nonbank covered persons with more than $7 million in annual receipts resulting from certain consumer reporting activities would be considered larger participants. The consumer reporting market includes consumer reporting agencies selling consumer reports, consumer report resellers, analyzers of consumer reports and other account information, and specialty consumer reporting agencies. The ANPR clarifies that specialty consumer reporting agencies "primarily collect and provide specific types of information that may be used to make decisions regarding particular consumer financial products or services, such as payday loans or checking accounts."
The Bureau notes that its test for larger participants in this market may be out-of-date. The definition of ''annual receipts'' was adapted from the definition of the term used by the Small Business Administration (SBA). When the Consumer Reporting Larger Participant Rule was issued, the SBA small-business threshold was $7 million in annual revenues. Today, the corresponding threshold is $41 million in annual revenues. Moreover, the Bureau originally only relied on Economic Census data to determine market sizes. Since then, the U.S. Census Bureau, in cooperation with the Small Business Administration Office of Advocacy, has developed an additional data source called Statistics of U.S. Businesses (SUSB). The SUSB data includes an estimated 250 total entities, of which fewer than 30 are above the current SBA threshold of $41 million in annual revenues for small businesses in NAICS code 561450 (Credit Bureaus).
The Bureau advises that, based on its risk-based prioritization process, the Bureau's examinations have largely focused on entities with annual receipts that significantly exceed both its own $7 million threshold, as well as the SBA's $41 million annual revenue threshold. In fact, according to the CFPB, the vast majority of the consumer reporting companies that it has examined have had annual receipts exceeding $50 million. Based on these examinations, the Bureau estimates that increasing the annual receipts threshold to match the SBA annual revenue threshold of $41 million would only leave about six larger participants in the market. The CFPB does not formally propose a $41 million threshold.
Consumer Debt Collection
The CFPB published the Consumer Debt Collection Larger Participant Rule on October 31, 2012. A nonbank covered person is a larger participant in the consumer debt collection market if they have more than $10 million in annual receipts resulting from consumer debt collection activities. The Bureau explained that it set the threshold at $10 million in annual receipts because it believed that threshold would cover a sufficient number of market participants to effectively assess compliance and risks to consumers, but at the same time cover only consumer debt collectors that can reasonably be considered ''larger'' participants in the market.
The Bureau is likewise concerned that its standard may be out-of-date. The SBA size standard for collections agencies is, most recently, $19.5 million, almost twice the Bureau's threshold. As a result, several collection agencies, classified as small businesses according to the SBA, are supervised as larger participants by the CFPB. While the Economic Census and SUSB differ on actual market size, both sources indicate that the collections industry has consolidated significantly since the Consumer Debt Collection Larger Participant Rule was issued. According to the CFPB, based on the most recent data from the 2022 Economic Census and the SUSB data, there are now about 2,500 to 3,000 entities engaged in debt collection, more than 1,000 less than when the CFPB issued the rule. Of this number, only approximately 200 to 250, have annual receipts exceeding $10 million. Among firms with over $10 million in revenues, roughly half have annual receipts between $10 and $25 million. The notice asserts that most of these entities are likely small business concerns, as defined by the SBA.
Therefore, the Bureau suggests that increasing the annual receipts threshold to $25 million would result in roughly 100 to 125 larger participants who have between roughly 55 to 70 percent of the total revenues reported for the covered debt collection industry. The CFPB does not formally propose a $25 million threshold, and also addresses thresholds of $50 and $100 million.
International Money Transfer
The Bureau published the International Money Transfer Larger Participant Rule on September 23, 2014. The final rule established that nonbank covered persons making at least one million aggregate annual international money transfers are larger participants in the market. International money transfers are electronic fund transfers sent by nonbank covered persons from U.S. consumers to persons or entities abroad. The notice distinguishes the definition of an "international money transfer" from the Bureau's definition of ''remittance transfer,'' in two main ways.
- The definition substitutes ''international money transfer provider'' in each place where the term ''remittance transfer provider'' appears in 12 CFR 1005.30(e).
- The International Money Transfer Larger Participant Rule defines ''international money transfer'' without regard to the amount of the transfer, unlike the Remittance Rule, which excludes transfers of $15 or less from the definition of ''remittance transfer.''
The International Money Transfer Larger Participant Rule was first issued to help ensure that these entities were complying with the consumer protections afforded by Electronic Fund Transfer Act as implemented by the Remittance Rule, as well as other federal consumer financial laws. According to the CFPB, based on data that State regulators collected from the fourth quarter of 2023 through the third quarter of 2024, approximately 28 nonbank covered persons currently qualify as larger participants. The notice remarks that the market for international money transfers is heavily concentrated. The Bureau found that the largest eight non-depository financial institutions conducted approximately 77% of estimated remittance transfers.
The CFPB proposes that a higher threshold might better balance the goals of protecting consumers while not unnecessarily imposing costs on covered persons. For example, the Bureau estimates that if it raises the threshold from 1,000,000 to 10,000,000 international money transfers per year, only approximately 15 nonbank covered persons would qualify as larger participants, but an estimated 94 percent of all international money transfers would still be covered. The CFPB does not formally propose a 10,000,000 threshold, and also addresses thresholds of 30,000,000 and 50,000,000.
Automobile Financing
The Bureau published the Automobile Financing Larger Participant Rule on June 30, 2015. Currently, a nonbank covered person is a larger participant of the automobile financing market if the nonbank covered person has at least 10,000 aggregate annual originations. The final rule defined ''annual originations'' to mean "the sum of the following transactions for the preceding calendar year: credit granted for the purchase of an automobile; refinancings of such obligations (and any subsequent refinancings thereof) that are secured by an automobile; automobile leases; and purchases or acquisitions of any of the foregoing obligations."
The automobile financing market includes the following types of nonbank covered persons: (1) specialty finance companies; (2) ''captive'' nonbanks (commonly referred to as ''captives''); and (3) Buy Here Pay Here (BHPH) finance companies. Specialty financing companies typically provide financing to subprime borrowers who tend to have past credit problems, lower income, or limited credit histories, which prevent them from being able to obtain financing elsewhere. Captives are subsidiary finance companies owned by auto manufacturers. They facilitate their parent companies' auto sales by providing consumers with financing and leases. According to the CFPB, at present, the five nonbank entities with the highest number of originations are captives. Lastly, BHPH dealers traditionally focus on subprime and deep subprime borrowers, and typically retain retail installment contracts or assign them to an affiliated finance company. Based on the Bureau's analysis of data from Experian VelocitySM for the period of February 1, 2024, to January 31, 2025, approximately 63 entities qualified as larger participants in this market. The 63 entities include all three categories of nonbanks: specialty finance companies, captives, and BHPH finance companies. However, the CFPB advises that 18 entities accounted for 80% of the originations.
In the advance notice, the Bureau expressed concern that the number of larger participants in the automobile financing market subject to supervision may be too broad, and potentially diverting limited Bureau resources to determine who is a larger participant and whether an entity should be examined in a particular year. By raising the threshold, the Bureau argues it could focus its supervisory oversight on the most active market participants with the highest interaction with consumers. For example, the Bureau noted that if it raises the threshold from 10,000 to 550,000 aggregate annual originations only 11 nonbank entities would qualify as larger participants, but the updated rule would still cover approximately 66% of originations. The CFPB does not formally propose a 550,000 originations threshold, and also addresses thresholds of 300,000 and 1,050,000 originations.
General Questions
In addition to market specific questions, the notices broadly ask commenters to provide insight on the following topics:
- What additional sources of data can be reliably used to inform estimates of current market sizes?
- How would changing the current threshold for larger participant benefit and/or harm consumers?
- What are the costs to covered entities that are specific to the Bureau's supervisory authority for larger participants in the relevant market?
- Are there costs or benefits to consumers, including rural consumers, servicemembers, and veterans, of raising the larger participant threshold?
- Are there significant recordkeeping requirements that would be reduced by raising the larger participant threshold?
- Should the Bureau's test for defining larger participants in the consumer reporting market account for the SBA's size standards? If so, how?
- The International Money Transfer ANPR specifically asks, would an increase in the threshold have a potential disproportionate impact on any geographic regions, and if so how?
The comment periods for all four notices end on September 22, 2025.
While the CFPB's cutbacks have been a cause of major concern among consumer advocates and various legislators and regulators, it remains to be seen whether these changes will be adopted and, if they are, whether the changes will result in the reduced, but more effective oversight the Bureau predicts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
