On September 22, a coalition of 19 state attorneys general (AGs) issued four letters to the CFPB urging the Bureau to withdraw proposed rules that the AGs allege would “dramatically shrink the Bureau’s supervisorial oversight” of the auto finance, consumer reporting, debt collection, and international money transfer markets (previously covered by InfoBytes here). The AGs averred the proposals would leave consumers who use the vast majority of the companies in the impacted markets without protection, undermining the CFPB’s statutory mandate.

Automobile Financing Market:

The coalition’s letter warned that the proposed threshold increase from 10,000 annual originations to as high as 1.05 million would cut supervision to as few as five companies. The AGs warned this would “radically reduce the CFPB’s coverage of the automobile finance market,” leaving less than half of the companies — and none of the subprime sector — under the Bureau’s supervision. The AGs highlighted that auto loans are “the most important consumer financial transaction besides a mortgage,” and urged the Bureau, if it proceeds, to adopt the lowest alternative threshold (300,000 annual originations), describing the higher thresholds as “entirely arbitrary” and asserting that they would leave the riskiest segments of the market unsupervised.

Consumer Reporting Market:

In their letter, the coalition argued that raising the threshold from $7 million to $41 million in annual receipts would limit Bureau supervision to as few as six companies, even as “the consumer reporting industry touches the lives of hundreds of millions of Americans.” The AGs stated that, in 2024, the 2.7 million complaints to the Bureau about consumer reporting issues accounted for 85 percent of all CFPB consumer complaints. Further, many of these complaints involved smaller and specialty agencies, which would be excluded from supervision under the new proposed threshold. The letter emphasized that the proposed rule would leave “entire categories of specialty consumer reporting entities that collect consumers’ most sensitive personal information unsupervised.”

Debt Collection Market:

The AGs, in their letter, urged the CFPB not to raise the supervision threshold for debt collectors, noting that the highest threshold — $100 million in annual receipts — would reduce the number of debt collectors under the Bureau’s supervision to 11 companies (i.e., 18 percent of market revenue) despite what the AGs characterized as “prevalent” illegal debt collection practices. The letter highlighted that debt collection complaints to the CFPB rose by 89 percent from 2023 to 2024 and argued that this proposal would “cripple[]” the CFPB’s ability to respond to consumer harm and market failures.

International Money Transfer Market:

The joint letter emphasized that the Bureau’s highest contemplated threshold of 50 million annual transfers would reduce the number of supervised nonbank providers from 28 to four. The AGs further argued that this reduction would result in much of the market falling outside CFPB oversight despite “widespread industry noncompliance” with the EFTA and remittance rule, as well as ongoing risks to consumers of hidden junk fees, transfer errors, and deception. The AGs pointed to the CFPB’s supervisory findings and enforcement actions in arguing that this reduced supervision could undermine consumer protection.