Consumer Financial Protection Bureau Proposes New Rules Reducing Regulatory Burdens on Consumer Reporting Agencies

The Consumer Financial Protection Bureau (the “Bureau”) recently announced two new interpretive rules that, if implemented, will significantly reduce regulatory burdens on many consumer reporting agencies (CRAs).

First, on August 8, 2025, the Bureau issued a notice of proposed rulemaking announcing its intention to amend the test to define larger participants in the consumer reporting market. Pursuant to 12 U.S.C. § 5514(a)(1)(B), the Bureau has supervisory authority over “a larger participant of a market for other consumer financial products,” including consumer reporting products. The Bureau’s current Consumer Reporting Larger Participant Rule (published on July 20, 2012) defines larger participants as those with more than $7 million in annual receipts resulting from relevant consumer reporting activities. However, the Bureau expressed concern that the benefits of this threshold for larger participants are outweighed by the compliance burdens imposed on CRAs, especially where most companies subject to Bureau examination under the Consumer Reporting Larger Participant Rule have annual receipts exceeding $50 million. In recognition of this data, the new proposed rule would increase this threshold for larger participants to $41 million in annual receipts to match the Small Business Administration’s threshold for defining small businesses.

The Bureau estimates that the higher threshold for defining larger participants will leave only six larger participants in the CRA market, removing all other CRAs from the Bureau’s supervisory authority and greatly reducing regulatory compliance burdens for CRAs that are no longer defined as larger participants. Comments on this proposed rule are due by September 22, 2025.

Second, on August 26, 2025, the Bureau issued a notice of proposed rulemaking seeking to “adopt a standard definition of ‘risks to consumers with regard to the offering or provision of consumer financial products or services’” to govern the Bureau’s supervisory powers over nonbank covered persons. The proposed rule addresses a long-dormant provision of the Consumer Financial Protection Act of 2010 (“CFPA”) which authorizes the Bureau to supervise nonbank covered persons that the Bureau has reasonable cause to determine have engaged in conduct which “poses a risk to consumers with regard to the offering or provision of consumer financial products or services.” 12 U.S.C. § 5514(a)(1)(C).

Prior to issuing updated examination procedures in April 2022, the Bureau had not exercised its authority under § 1024(a)(1)(C) to examine nonbank persons based on the “risk to consumers” standard. Despite its decision to issue supervisory designation orders under this provision, the Bureau has yet to issue guidance on the meaning of “risk to consumers,” instead making that determination on an ad hoc basis in individual orders. 

The proposed rule seeks to promote certainty and consistency in the Bureau’s exercise of its supervisory authority of nonbanks by defining “conduct which poses risks to consumers” to consist 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 section 1002 of the CFPA.” The Bureau’s preliminary view, subject to comment, is that Congress intended that the Bureau focus its supervisory resources on serious conduct presenting a non-speculative risk of material harm to consumers, contrary to the broad interpretation seen in some prior supervisory designation orders under this section. The Bureau specifically requested comment on whether the “risk to consumers” sufficient to warrant supervision must involve potential violations of law. The deadline for the public to comment on the proposed rule is September 25, 2025. While the final rule remains subject to public comment, the Bureau states that it believes that the proposed rule will make it less likely that any specific entity will be designated for supervision.

The Bureau has expressly stated that it expects these two proposed rules to significantly reduce the regulatory burden on nonbank participants generally, and especially on entities with less than $41 million in annual receipts from consumer reporting activities. If the proposed rules are adopted, most CRAs can expect to benefit from the reduced regulatory burden.