Chapman Law Review - Chapman University

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38 Chapman Law Review [Vol. 15:1
draw: information obtained directly from fringe banking firms
through the Bureau‘s supervision powers.
B. Monitoring and Supervision
Fringe banking will also be affected in a second innovation
found in the Act: the Act empowers the Bureau to monitor and
supervise nondepositories. 78 These powers have the potential to
dramatically increase the amount of data available about fringe
banking firms, but also to impose costs on firms operating in
these markets.
First, the Act mandates that the Bureau ―monitor for risks to
consumers in the offering or provision of consumer financial
products or services.‖ 79 As in other contexts, the fringe economy
should play an important role in this monitoring because the Act
instructs the Bureau to allocate its resources for monitoring in
light of ―the extent, if any, to which the risks of a consumer
financial product or service may disproportionately affect
traditionally underserved consumers . . . .‖ 80
This monitoring power has the potential to supply the
Bureau with substantial information about the fringe economy
because the Bureau can require covered entities to file special or
annual reports or to submit answers to questions from the
Bureau. 81 This power to obtain information even extends to
entities that are not determined to be covered by the Act; the
Bureau can require firms to file annual reports so that the
Bureau can assess whether they are covered by the Act. 82
In addition to requiring reports, the Bureau can also require
fringe banking firms to register with the federal government. 83
Registration requirements in some cases will be duplicative of
the extensive state registration rules, 84 so the Act requires the
Bureau to consult with state agencies when promulgating its
rules. 85
78 Dodd-Frank § 1024(b).
79 Dodd-Frank § 1022(c)(1).
80 Dodd-Frank § 1022(c)(2)(E).
81 Dodd-Frank § 1022(c)(4)(B)(ii).
82 Dodd-Frank § 1022(c)(5) (―In order to assess whether a nondepository is a covered
person, as defined in section 1002, the Bureau may require such nondepository to file with
the Bureau, under oath or otherwise, in such form and within such reasonable period of
time as the Bureau may prescribe by rule or order, annual or special reports, or answers
in writing to specific questions.‖).
83 Dodd-Frank § 1022(c)(7)(A).
84 See, e.g., DEL. CODE ANN. tit. 5, § 2202 (2010) (requiring title lenders to obtain
licenses from the state); FLA. STAT. § 537.007 (2010) (same); IDAHO CODE ANN. § 28-46-
503 (2010) (same).
85 Dodd-Frank § 1022(c)(7)(C).