PART 1090—DEFINING LARGER PARTICIPANTS OF CERTAIN CONSUMER FINANCIAL PRODUCT AND SERVICE MARKETS Authority: 12 U.S.C. 5514(a)(1)(B); 12 U.S.C. 5514(a)(2); 12 U.S.C. 5514(b)(7)(A); and 12 U.S.C. 5512(b)(1). Source: 77 FR 42898, July 20, 2012, unless otherwise noted. Subpart A—General § 1090.100 Scope and purpose. This part defines those nonbank covered persons that qualify as larger participants of certain markets for consumer financial products or services pursuant to 12 U.S.C. 5514(a)(1)(B) and (a)(2). A larger participant of a market covered by this part is subject to the supervisory authority of the Bureau under 12 U.S.C. 5514. This part also establishes rules to facilitate the Bureau's supervision of such larger participants pursuant to 12 U.S.C. 5514(b)(7). § 1090.101 Definitions. For the purposes of this part, the following definitions apply: Affiliated company (1) For purposes of this definition “company” means any corporation, limited liability company, business trust, general or limited partnership, proprietorship, cooperative, association, or similar organization. (2) A person has control over another person if: (i) The person directly or indirectly or acting through one or more other persons owns, controls, or has power to vote 25 percent or more of any class of voting securities or similar ownership interest of the other person; (ii) The person controls in any manner the election of a majority of the directors, trustees, members, or general partners of the other person; or (iii) The person directly or indirectly exercises a controlling influence over the management or policies of the other person. Bureau Completed fiscal year (1) A “fiscal year” is 12 consecutive months ending on the last day of any month except December 31. (2) A “calendar year” is 12 consecutive months ending on December 31. (3) A “tax year” is an annual accounting period for keeping records and reporting income and expenses, or, if appropriate, a short tax year. An annual accounting period does not include a short tax year. (4) A “short tax year” is a tax year of less than 12 months. Consumer Consumer financial product or service (1) 12 U.S.C. 5481(15)(A) and is offered or provided for use by consumers primarily for personal, family, or household purposes; or (2) Clause (i), (iii), (ix), or (x) of 12 U.S.C. 5481(15)(A) and is delivered, offered, or provided in connection with a consumer financial product or service referred to in paragraph (1) of this definition. Dodd-Frank Act Larger participant Nonbank covered person (1) Any person that engages in offering or providing a consumer financial product or service; and (2) Any affiliate of a person that engages in offering or providing a consumer financial product or service if such affiliate acts as a service provider to such person. Person Supervision and supervisory activity Supervision Director [77 FR 42898, July 20, 2012, as amended at 80 FR 37526, June 30, 2015; 89 FR 94601, Nov. 29, 2024] § 1090.102 Status as larger participant subject to supervision. A person qualifying as a larger participant under subpart B of this part shall not cease to be a larger participant under this part until two years from the first day of the tax year in which the person last met the applicable test under subpart B. § 1090.103 Assessing status as a larger participant. (a) If a person receives a written communication from the Bureau initiating a supervisory activity pursuant to 12 U.S.C. 5514, such person may respond by asserting that the person does not meet the definition of a larger participant of a market covered by this part within 45 days of the date of the communication. Such response must be sent to the Supervision Director by electronic transmission at the address included in the communication and must include an affidavit setting forth an explanation of the basis for the person's assertion that it does not meet the definition of larger participant of a market covered by this part and therefore is not subject to the Bureau's supervisory authority under 12 U.S.C. 5514. In addition, a person may include with the response copies of any records, documents, or other information on which the person relied in making the assertion. (b) A person shall be deemed to have waived the opportunity, at any time that it may dispute that it qualifies as a larger participant, to rely on any argument, records, documents, or other information that it fails to submit to the Supervision Director under paragraph (a) of this section. A person who fails to respond to the Bureau's written communication within 45 days will be deemed to have acknowledged that it is a larger participant. (c) The Supervision Director shall review the affidavit, any attached records, documents, or other information submitted pursuant to paragraph (a) of this section, and any other information the Supervision Director deems relevant, and thereafter send by electronic transmission to the person a statement explaining whether the person meets the definition for a larger participant of a market covered by this part. (d) At any time, including prior to issuing the written communication referred to in paragraph (a) of this section, the Supervision Director may require that a person provide to the Bureau such records, documents, and information as the Supervision Director may deem appropriate to assess whether a person qualifies as a larger participant. Persons must provide the requisite records, documents, and other information to the Bureau within the time period specified in the request. (e) The Supervision Director, in her or his discretion, may modify any timeframe prescribed by this section on her or his own initiative or for good cause shown. [77 FR 42898, July 20, 2012, as amended at 89 FR 94601, Nov. 29, 2024] Subpart B—Markets § 1090.104 Consumer Reporting Market. (a) Market-Related definitions. Annual receipts (i) Receipts (ii) Period of measurement. (B) Annual receipts of a person that has been in business for less than three completed fiscal years means the total receipts of the person for the period the person has been in business divided by the number of weeks in business, multiplied by 52. (C) Where a person has been in business for three or more completed fiscal years, but one of the years within its period of measurement is a short tax year, annual receipts means the total receipts for the short year and the two full fiscal or calendar years divided by the total number of weeks in the short year and the two full fiscal or calendar years, multiplied by 52. (iii) Annual receipts of affiliated companies. (B) If a person has acquired an affiliated company or been acquired by an affiliated company during the applicable period of measurement, the annual receipts of the person and the affiliated company are aggregated for the entire period of measurement (not just the period after the affiliation arose). (C) Receipts are calculated separately for the person and each of its affiliated companies in accordance with paragraph (ii) of this definition even though this may result in using a different period of measurement to calculate an affiliated company's annual receipts. Thus, for example, if an affiliated company has been in business for a period of less than three years, the affiliated company's receipts are to be annualized in accordance with paragraph (ii)(B) of this definition even if the person has been in business for three or more completed fiscal years. (D) The annual receipts of a formerly affiliated company are not included in the annual receipts of a nonbank covered person for purposes of this section, if the affiliation ceased before the applicable period of measurement as set forth in paragraph (ii) of this definition. The annual receipts of a nonbank covered person and its formerly affiliated company are aggregated for the entire period of measurement if the affiliation ceased during the applicable period of measurement as set forth in paragraph (ii) of this definition. Consumer reporting (i) In general. (ii) Exclusion for transaction and experience information. (iii) Exclusion for furnishing affiliate information to a consumer reporting entity. (iv) Exclusion for certain authorizations or approvals. (v) Exclusion for providing information to be used solely in a decision regarding employment, government licensing, or residential leasing or tenancy. (b) Test to define larger participants. [77 FR 42898, July 20, 2012, as amended at 80 FR 37526, June 30, 2015] § 1090.105 Consumer debt collection market. (a) Market-Related definitions. Annual receipts (i) Receipts (ii) Period of measurement. (B) Annual receipts of a person that has been in business for less than three completed fiscal years means the total receipts of the person for the period the person has been in business divided by the number of weeks in business, multiplied by 52. (C) Where a person has been in business for three or more completed fiscal years, but one of the years within its period of measurement is a short tax year, annual receipts means the total receipts for the short year and the two full fiscal or calendar years divided by the total number of weeks in the short year and the two full fiscal or calendar years, multiplied by 52. (iii) Annual receipts of affiliated companies. (B) If a person has acquired an affiliated company or been acquired by an affiliated company during the applicable period of measurement, the annual receipts of the person and the affiliated company are aggregated for the entire period of measurement (not just the period after the affiliation arose). (C) Receipts are calculated separately for the person and each of its affiliated companies in accordance with paragraph (ii) of this definition even though this may result in using a different period of measurement to calculate an affiliated company's annual receipts. Thus, for example, if an affiliated company has been in business for a period of less than three years, the affiliated company's receipts are to be annualized in accordance with paragraph (ii) of this definition even if the person has been in business for three or more completed fiscal years. (D) The annual receipts of a formerly affiliated company are not included in the annual receipts of a nonbank covered person for purposes of this section if the affiliation ceased before the applicable period of measurement as set forth in paragraph (ii) of this definition. The annual receipts of a nonbank covered person and its formerly affiliated company are aggregated for the entire period of measurement if the affiliation ceased during the applicable period of measurement as set forth in paragraph (ii) of this definition. (E) Annual receipts do not include receipts that result from the collection of debt that was originally owed to a medical provider. Consumer debt collection Creditor Debt collector (i) Any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts; (ii) Any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; (iii) Any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity: (A) Concerns a debt which was originated by such person; or (B) Concerns a debt which was not in default at the time it was obtained by such person; and (iv) Any person engaged solely in enforcing a security interest. (b) Test to define larger participants. [77 FR 65798, Oct. 31, 2012, as amended at 77 FR 72913, Dec. 7, 2012; 80 FR 37526, June 30, 2015] § 1090.106 Student loan servicing market. (a) Market-related definitions. Account volume (i) Number of accounts. (ii) Time of measurement. (iii) Affiliated companies. (B) If two persons become affiliated companies, each person's number of accounts as of the prior calendar year's December 31 is included in the total account volume. (C) If two affiliated companies cease to be affiliated companies, the number of accounts of each continues to be included in the other's account volume until the succeeding December 31. Post-secondary education expenses ll. Post-secondary education loan et seq. Student loan servicing (i)(A) Receiving any scheduled periodic payments from a borrower or notification of such payments and (B) Applying payments to the borrower's account pursuant to the terms of the post-secondary education loan or of the contract governing the servicing; (ii) During a period when no payment is required on a post-secondary education loan, (A) Maintaining account records for the loan and (B) Communicating with the borrower regarding the loan, on behalf of the loan's holder; or (iii) Interactions with a borrower, including activities to help prevent default on obligations arising from post-secondary education loans, conducted to facilitate the activities described in paragraph (i) or (ii) of this definition. (b) Test to define larger participants. [78 FR 73406, Dec. 6, 2013] § 1090.107 International Money Transfer Market. (a) Market-related definitions. Aggregate annual international money transfers (i) Annual international money transfers. (ii) Agents. (B) Annual international money transfers of a nonbank covered person do not include international money transfers in which another person provided the international money transfers and the nonbank covered person performed activities as an agent on behalf of that other person. (C) For purposes of this paragraph (ii), agent means an agent or authorized delegate, as defined under State or other applicable law, or affiliated company of a person that provides international money transfers when such agent, authorized delegate, or affiliated company acts for that person. (iii) Aggregating the annual international money transfers of affiliated companies. (B) The annual international money transfers of a nonbank covered person must be aggregated with the annual international money transfers of any person that was an affiliated company of the nonbank covered person at any time during the preceding calendar year. The annual international money transfers of the nonbank covered person and its affiliated companies are aggregated for the entire preceding calendar year, even if the affiliation did not exist for the entire calendar year. Designated recipient International money transfer International money transfer provider Sender State (b) Test to define larger participants. [79 FR 56650, Sept. 23, 2014] § 1090.108 Automobile financing market. (a) Market-related definitions. Aggregate annual originations (i) Annual Originations. ( 1 ( 2 ( 3 1 ( 4 1 2 3 (B) The term annual originations does not include: ( 1 ( 2 (ii) Aggregating the annual originations of affiliated companies. Automobile Automobile financing Automobile lease Refinancing (b) Test to define larger participants. (c) Exclusion for dealers. (1) Persons excluded from the Bureau's authority by 12 U.S.C. 5519; and (2) Persons who meet the definition in 12 U.S.C. 5519(f)(2); are identified in 12 U.S.C. 5519(b)(2); and are predominantly engaged in the sale and servicing of motor vehicles (as that term is defined in 12 U.S.C. 5519(f)(1)), the leasing and servicing of motor vehicles, or both. [80 FR 37526, June 30, 2015] § 1090.109 General-use digital consumer payment applications market. (a)(1) Market definition. Providing a general-use digital consumer payment application (2) Market-related definitions. (i) Consumer payment transaction(s) (A) An international money transfer as defined in § 1090.107(a); (B) A transfer of funds by a consumer: ( 1 ( 2 (C) A payment transaction conducted by a person for the sale or lease of goods or services that a consumer selected from that person or its affiliated company's online or physical store or marketplace, or for a donation to a fundraiser that a consumer selected from that person or its affiliated company's platform; and (D) An extension of consumer credit initiated through a digital application that is provided by a person who is extending, brokering, acquiring, or purchasing the credit or that person's affiliated company. (ii) Covered payment functionality (A) Funds transfer functionality ( 1 ( 2 (B) Payment wallet functionality ( 1 ( 2 (iii) Digital payment application, (iv) General use, (A) Using accounts described in § 1005.2(b)(3)(ii)(A), (C) or (D) of this chapter; or (B) To pay a specific debt or type of debt including: ( 1 ( 2 (v) State (b) Test to define larger participants. (1) It provided annual covered consumer payment transaction volume as defined in paragraph (b)(3) of this section of at least 50 million consumer payment transactions; and (2) It was not a “small business concern” as that term is defined by section 3(a) of the Small Business Act, 15 U.S.C. 632(a) and implemented by the Small Business Administration under 13 CFR part 121, or any successor provisions. (3) Annual covered consumer payment transaction volume (i) Method of aggregating the annual covered consumer payment transaction volume of affiliated companies. (ii) [Reserved] [89 FR 99653, Dec. 10, 2024]