A nonbank is an institution that provides financial services or products but does not have a bank, thrift, or credit union charter. The Nonbank Supervision Program will subject some nonbanks to the same consumer protection standards as currently applied to banks. This report will describe the Nonbank Supervision Program, the structure and powers of the CFPB, and other early CFPB initiatives. This report does not address arguments that have been made against the validity of the recess appointment itself, nor does it address related questions that have been raised regarding the scope of Cordray's authority as the director of the CFPB while serving pursuant to a recess appointment. Overview of the Bureau

The Consumer Financial Protection Bureau was established by Title X of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act ( P.L. 111-203 , the Dodd-Frank Act). The creation of the CFPB consolidates many consumer financial protection responsibilities into one agency. The Dodd-Frank Act states that the purpose of the CFPB is to implement and enforce federal consumer financial law while ensuring that consumers can access financial products and services. The CFPB is also instructed to ensure that the markets for consumer financial services and products are fair, transparent, and competitive. To fulfill its mandate, the CFPB can issue rules, examine certain institutions, and enforce consumer protection laws and regulations. Early Agenda of the New Director: Nonbank Supervision Program

On January 4, 2012, President Obama installed Richard Cordray as the director of the Consumer Financial Protection Bureau via recess appointment. As stated in CRS Report R41839, Limitations on the Secretary of the Treasury's Authority to Exercise the Powers of the Bureau of Consumer Financial Protection , by [author name scrubbed],
Until a CFPB Director is appointed, the CFP Act provides the Secretary (of the Treasury) the authority to exercise some, but not all of the Bureau's authorities. Using its "newly established" powers after Cordray's appointment, the CFPB announced its Nonbank Supervision Program. Under the Program, the CFPB has authority to supervise three groups of nonbanks. First, the CFPB can regulate nonbanks in three specific markets—mortgage companies, payday lenders, and private education lenders. Second, the CFPB can regulate the "larger participants" in other financial markets. Third, the CFPB may supervise a nonbank that is performing actions that may pose a risk to consumers with regard to consumer financial products or services.
The Consumer Financial Protection Bureau (CFPB) was established by Title X of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act (P.L. 111-203, the Dodd-Frank Act). The creation of the CFPB consolidates many existing consumer financial protection responsibilities into one agency. The Dodd-Frank Act states that the purpose of the CFPB is to implement and enforce federal consumer financial law while ensuring that consumers can access financial products and services. The CFPB is also instructed to ensure that the markets for consumer financial services and products are fair, transparent, and competitive. To fulfill its mandate, the CFPB can issue rules, examine certain institutions, and enforce consumer protection laws and regulations.
On January 4, 2012, President Obama installed Richard Cordray as the director of the Consumer Financial Protection Bureau via recess appointment. As explained in CRS Report R41839, Limitations on the Secretary of the Treasury's Authority to Exercise the Powers of the Bureau of Consumer Financial Protection, by [author name scrubbed], the Dodd-Frank Act transferred some powers to the CFPB and established new powers. The CFPB could not exercise its new powers until a director was appointed. Included in the newly established powers is the authority to regulate certain nonbanks for consumer protection. Under the new authority conferred by the appointment of Cordray, the CFPB announced the Nonbank Supervision Program. A nonbank is an institution that provides financial services but does not have a bank, thrift, or credit union charter. The Nonbank Supervision Program will subject some nonbanks to the same consumer protection standards as currently applied to banks. Under the program, the CFPB will supervise three groups of nonbanks. First, the CFPB can regulate nonbanks in three specific markets—mortgage companies, payday lenders, and private education lenders. Second, the CFPB can regulate the "larger participants" in other financial markets. Third, the CFPB may supervise a nonbank that is performing actions that may pose a risk to consumers with regard to consumer financial products or services. This report describes the Nonbank Supervision Program as well as other initiatives that the CFPB has started since its creation.
This report does not address arguments that have been made against the validity of the recess appointment itself, nor does it address related questions that have been raised regarding the scope of Cordray's authority as the director of the CFPB while serving pursuant to a recess appointment.