The Consumer Financial Protection Bureau (CFPB) is invoking a little-used legal provision to let it examine the fast-growing number of nonbank fintechs that could pose a risk to Americans.
The CFPB says that, under the Dodd-Frank Act, it can supervise "nonbanks whose activities the CFPB has reasonable cause to determine pose risks to consumers".
The agency implemented the provision through a procedural rule in 2013, but has only now begun to invoke this authority.
With so many nonbanks now offering a plethora of financial services to millions of Americans, the CFPB says it will examine potentially unfair, deceptive, or abusive acts or practices.
"Given the rapid growth of consumer offerings by nonbanks, the CFPB is now utilising a dormant authority to hold nonbanks to the same standards that banks are held to," says CFPB director Rohit Chopra.