The National Consumer Law Center seems to be urging the CFPB to adopt a “Hotel California” approach to its supervision of larger participants. Referred to as the “Hotel California” provision, the Dodd-Frank Act provides that large bank holding companies that accepted TARP money remain subject to Fed supervision even if they give up their BHC status. In its comment letter on the CFPB’s proposal to define larger participants, the NCLC states that the CFPB “should adopt rules allowing it to initiate or continue supervision over participants that take action with the intention of evading supervision.”
The NCLC does not describe what kinds of actions would demonstrate such an intention, but presumably it could include any restructuring of a larger participant’s business in which the resulting entities would not meet whatever criteria the CFPB established to define who is a larger participant. In other words, as the Eagles’ song goes, once you are considered a larger participant, “you can check out any time you like, but you can never leave” the CFPB’s supervision. Since Congress clearly knows how to write a “Hotel California” provision and did not include one for larger participants supervised by the CFPB, we see no basis for the approach urged by the NCLC.