The move aligns with the bureau’s new priorities of reducing regulations, slashing staff and cutting funding. Acting CFPB Director Russell Vought on Friday proposed redefining how many companies would qualify as “larger participants,” that would subject them to oversight by the bureau to ensure compliance with federal consumer financial laws. Supervision subjects companies to range of activities including examinations, information requests, and ongoing monitoring, to assess risks to consumers and the overall market. Vought has proposed raising the revenue threshold for nonbanks in four key markets that would have the effect of reducing overall nonbank supervision, aligning with the leadership’s deregulatory priorities. The CFPB is seeking comments on its advance notice of proposed rulemaking by Sept. 22. In April, the CFPB issued a memo outlining its priorities to focus almost exclusively on supervising large banks while reducing supervision of nonbank competitors, some of which offer nearly identical products and services. The bureau has issued six larger participant rules since 2012 that define supervision of nonbanks. “The bureau is concerned that the benefits of the current threshold may not justify the compliance burdens for many of the entities that are currently considered larger participants,” the proposal states. “The current threshold may be diverting limited bureau resources to determine whom among the universe of providers may be subject to the bureau’s supervisory authority and whether these providers should be examined in a particular year.” The change would provide extensive relief to nonbanks that had been subject to CFPB exams. “From an industry standpoint, it would be a relief because CFPB supervision is extremely burdensome to prepare for and deal with,” said Chris Willis, a partner at the law firm Troutman Pepper. Under the Trump administration, it is unclear if the CFPB is conducting any supervisory exams of banks or nonbanks. Vought is currently locked in a legal dispute with the National Treasury Employees Union and is seeking to issue a reduction in force to fire up to 1,500 employees at the agency. Because of the Trump administration’s efforts to fire civil service employees, the CFPB has limited rulemaking resources. It is already in the process of writing a new open banking rule to protect consumer financial data rights and is tapping employees at the Office of Management and Budget, an agency also headed by Vought, to help out with rule-writing. Vought is seeking comment on 13 specific questions as part of the effort to redefine larger participants including whether there should be a different revenue threshold or other criteria. The CFPB wants to address the costs and benefits to consumers if it makes a change to the threshold test, and whether raising the threshold would impact the bureau’s ability to address potential market failures. One of the questions asks: “Are there costs or benefits to consumers, including rural consumers, servicemembers, and veterans, of raising the larger participant threshold?” The CFPB also wants to know if small- or mid-size companies should qualify as larger participants and whether there are “significant recordkeeping requirements that would be reduced by raising the larger participant threshold.”