With a director now in place in former Ohio attorney general Richard Cordray, the Consumer Financial Protection Bureau can now expand its power and implement further regulations against not only banks, but nonbank lenders as well.
President Barack Obama made the decision to place Cordray as director of the agency earlier in January during Congress' recess, which is a point of contention with some lawmakers.
The government agency stated mortgage and payday lenders, consumer credit agencies and other related nonbank firms can now be regulated by the CFPB.
As with reviews of banks and their business with consumers, the CFPB said it will also conduct inquiries into nonbanks who lend to consumers, particularly credit card and mortgage firms, to ensure fair practices.
"One important component that examiners will be looking for is the nonbank's internal ability to detect, prevent, and remedy violations that may harm consumers," the CFPB said in a statement on January 5.
In a speech at the Brookings Institution, Cordray stated he will work to develop clear standards banks and nonbanks must follow to avoid another mortgage crisis, which led to millions of foreclosed houses nationwide.