On August 26, 2025, the CFPB issued a proposed rule adopting a standard definition of “risks to consumers with regard to the offering or provision of consumer financial products or services” that will bind the Bureau in proceedings to designate nonbank covered persons for Bureau supervision. The CFPB stated that this will ensure that the Bureau acts within the bounds of its statutory authority and provide clarity to institutions about the standard it applies.
Prior to the proposed rule, the CFPB had not issued a rule clarifying “risks to consumers” under section 1024(a)(1)(C) of the CFPA, relying instead on individual case orders. This creates three main issues: inconsistent application of “risks to consumers,” uncertainty for institutions regarding the relevant standards, and the potential for not adhering to the best interpretation of the section. The proposed rule aims to establish a consistent and clear standard for the Bureau to follow.
The proposed rule would explain that, for purposes of section 1024(a)(1)(C) of the CFPA, “conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services” consists of conduct that:
(a) presents a high likelihood of significant harm to consumers; and
(b) is directly connected to the offering or provision of a consumer financial product or service as defined in the CFPA.
In addition, the Bureau proposes to find that the phrase “with regard to the offering or provision of consumer financial products or services” requires a direct connection to a statutorily defined “consumer financial product or service.” The Bureau intends to focus only on the specific categories of products and services that Congress charged the Bureau with overseeing.
The CFPB is accepting comments on the proposed rule until September 25, 2025.
The proposed rule can be found here.
