CFPB Seeks to Redefine “Larger Participants” it Supervises in Most Consumer Finance Markets: Asks for Public Comments on Decade-Old Definitions
CFPB Seeks to Redefine Larger Participants in Markets it Supervises, Jettisoning Supervision of Many Nonbank Companies
On August 8, 2025, the Consumer Financial Protection Bureau (“CFPB”) published four “advance notices of proposed rulemaking” (“ANPRs”), in which the CFPB announced that it was considering amendments to the definitions of “larger participant” in the automobile financing, consumer reporting, consumer debt collection, and international money transfer markets. The ANPRs indicate that the CFPB is considering proposals to substantially raise the numerical thresholds for entities to fall under the “larger participant” definition in each market, which would, in turn, substantially decrease the amount of nonbank entities the CFPB would supervise in each market. The public comment deadline for each ANPR is September 22, 2025.
I. Background
As background, the Dodd-Frank Act gave the CFPB authority to supervise all nonbank entities in a market in only a few enumerated markets (essentially, mortgage lenders, brokers, and servicers; private student loan lenders; and payday loan lenders). For other markets, the Dodd-Frank Act only gave the CFPB authority to supervise nonbanks that are a “larger participant” of the market and required the CFPB to issue rules defining that term for those markets (the agency can also supervise other entities it believes pose risks to consumers after an administrative notice process). The CFPB’s “larger participant” rules are used to determine which of the largest nonbank entities the CFPB will supervise in a market. The CFPB has issued rules for the aforementioned markets, as well the student loan servicing market and the digital payment application market, the latter of which was disapproved and voided under the Congressional Review Act in May 2025. The CFPB indicated it is also assessing the definition in the student loan servicing market.
II. Considered Revisions to the Current Larger Participant Tests
The Bureau is now considering updates to the decade-old rules for defining larger auto lenders, debt collectors, consumer reporting agencies, and international money transfer providers, citing concerns that “the benefits of supervisory authority. . . may not justify the costs of increased compliance burdens for many entities that are considered larger participants under the current test[s].” Because many smaller businesses now meet these outdated thresholds, the CFPB worries that such businesses will be disproportionately impacted, while, at the same time, the pool of supervised entities has grown too large for the Bureau to manage with limited resources.
A. Defining Larger Participants of the Automobile Financing Market, 80 Fed. Reg. 37495 (Jun. 30, 2015)
The CFPB’s 2015 rule defines larger participants of the automobile financing market as nonbank covered persons with at least 10,000 aggregate annual originations (which includes lending, leasing, refinancing, and purchasing the same). Based on data obtained by the CFPB, the definition currently covers approximately 63 entities, which may include entities subject to supervision under other CFPB authority. In considering whether to raise this threshold for the first time since the rule was issued, the CFPB sets out three potential options for the number of aggregate annual originations:
Raise the threshold to 550,000, yielding an estimated 11 larger participants that cover approximately 66% of originations;
Raise the threshold to 300,000, yielding an estimated 17 larger participants that cover approximately 79% of originations; or
Raise the threshold to 1,050,000, yielding an estimated five larger participants that cover approximately 42% of originations.
The ANPR also sets forth specific questions for the public to comment on, including:
Should the Bureau reconsider the threshold for aggregate annual originations to qualify as a larger participant in the automobile financing market?
What threshold and number of participants allows the Bureau to effectively focus on the largest participants and efficiently use its resources?
Should the Bureau consider separate thresholds for each type of participant in this market, i.e., captives, specialty finance, and BHPH finance companies to capture the largest participants of each type?
B. Defining Larger Participants of the Consumer Reporting Market, 77 Fed. Reg. 42873 (Jul. 20, 2012)
The CFPB issued the consumer reporting larger participant rule more than a decade ago in 2012. Under the rule, consumer reporting agencies earning more than $7 million in annual receipts from qualifying consumer reporting activities are considered larger participants of that market. The CFPB stated that it used Economic Census data for its 2012 final rule, but that the Census Bureau created a new data source called the Statistics of U.S. Businesses, which may be relevant. In addition, the CFPB stated that the vast majority of companies the CFPB has examined under the rule have had annual receipts exceeding $50 million. In addition, while in 2012 the Small Business Administration (“SBA”) definition for consumer reporting companies was $7 million in annual revenues, today the threshold is $41 million. The CFPB estimated that increasing the rule’s annual receipts threshold to match the updated SBA threshold of $41 million would leave at least six larger participants in the market. This appears to be the threshold the CFPB is considering. The CFPB asked specific questions, including:
Is $7 million in annual receipts resulting from relevant consumer reporting activities an appropriate threshold for determining which entities should be considered larger participants in the consumer reporting market?
If not, what annual receipts threshold or other criterion (e.g., number of consumers or consumer files) and associated threshold would be more appropriate and why?
C. Defining Larger Participants of the Consumer Debt Collection Market, 77 Fed. Reg. 65775 (Oct. 31, 2012)
The CFPB issued the rule defining larger participants in the consumer debt collection market in 2012, which established a threshold of $10 million in annual receipts. The original threshold was based on 2007 census data that indicated only 4% of debt collection companies had annul receipts exceeding $10 million. The CFPB stated that based on newer data, that number is closer to 7 to 10%. The CFPB also noted that in 2013, the SBA classified a debt collection agency as a small business if its annual receipts were less than $7 million, but that the threshold has since increased to $19.5 million, almost twice the CFPB’s threshold, meaning the current threshold covers a number of small businesses.
The CFPB posited that increasing the threshold to $25 million in annual receipts would yield approximately 100 to 125 larger participants that make up around 55 to 70% of total market revenue. In considering an even higher threshold of $50 million, the CFPB stated that newer data suggests that between 60 and 90 debt collection firms would be considered larger participants, accounting for 41 to 58% of total market revenue. The CFPB asked specific questions, including:
Is $10 million in annual receipts an appropriate threshold for determining which entities should be considered larger participants in the consumer debt collection market?
If not, what annual receipts threshold or other criterion and associated threshold would be more appropriate and why?
D. Defining Larger Participants of the International Money Transfer Market, 79 Fed. Reg. 56631 (Sep. 12, 2014)
The CFPB issued the international money transfer larger participant rule in 2014, which defines larger participants as firms that facilitate at least 1 million aggregate annual international money transfers. Based on data the CFPB collected from state regulators in 2023 and 2024, around 28 international money transfer providers currently meet this definition. The CFPB acknowledged in the 2014 rule that it was not aware of a data source where institutions report their total number of international money transfers consistent with its rule and stated that the same is true now. The CFPB stated, for example, that the state regulators’ data does not differentiate between transfers initiated by consumers and transfers initiated by businesses, and that business transfers do not count towards the threshold.
The CFPB believes that, because the market is heavily concentrated (the largest eight international money transfer providers account for around 77% of transfers), the current threshold is overinclusive. The CFPB estimated that the current threshold covers approximately 28 nonbank providers that provide 98% of all international money transfers. To protect smaller participants from disproportionate impact, the Bureau is considering three options:
Raise the threshold to 10 million, yielding an estimated 15 larger participants that account for an estimated 94% of all transfers;
Raise the threshold to 30 million, yielding an estimated eight larger participants that account for an estimated 77% of all transfers; or
Raise the threshold to 50 million, yielding an estimated four larger participants that account for an estimated 61% of all transfers.
The CFPB asked specific questions, including:
What additional sources of data, if any, are available that can reliably inform estimates of the current size of the international money transfer market, the participation in the market by nonbanks, banks, and credit unions, and the number of institutions that qualify as larger participants?
Should the Bureau consider defining larger participants in the international money transfer market in relation to the Small Business Administration's size standards? If so, how?
III. Why this Matters
Based on the data described in the ANPRs, it does appear that these markets have changed in the decade since the CFPB originally issued these rules. For companies in the auto lending, consumer reporting, debt collection, and international money transfer markets, these ANPRs are a chance to redefine the scope of the CFPB’s supervisory authority and seek higher larger participant thresholds that match the current economy. Smaller participants currently worried about exceeding the existing thresholds or struggling with the compliance costs that accompany CFPB supervision have a great opportunity to submit comment letters that demonstrate why smaller companies should not be subject to the heightened level of scrutiny that Dodd Frank intended to reserve for “larger participants.”
Comments are due September 22, 2025. Our team is well versed in keeping up with regulatory changes and driving them to the benefit of our clients. Personally, I spent a great deal of time reviewing public comment letters when I was a CFPB Senior Attorney and Special Counsel in the Office of Regulations. And we have submitted many comment letters to regulatory agencies on behalf of our clients. If you would like to discuss how such a rulemaking would affect your business or would like assistance with submitting a comment letter to the CFPB, please contact me at rich@garrishorn.com.
