Overview
- The draft rule would define risks to consumers as conduct presenting a high likelihood of significant harm that is directly connected to a consumer financial product or service.
- CFPB says the binding standard is meant to replace ad hoc designation orders to improve consistency and reduce uncertainty for firms.
- The agency acknowledges fewer nonbank entities are likely to be designated for supervision under the narrower framework, noting it has used this authority fewer than twenty times since 2013.
- Comments are due by Sept. 25, 2025, with any final rule taking effect 30 days after publication or 60 days if deemed a major rule under the Congressional Review Act.
- The proposal would not change supervision of insured depository institutions or credit unions with $10 billion or less in assets, which fall outside the designation authority.