The Consumer Financial Protection Bureau is proposing to expand its supervisory oversight beyond the banks to about 38 additional nonbank auto finance companies, according to an announcement from the bureau today.

Each of those 38 additional companies make, acquire, or refinance at least 10,000 or more loans or leases in a year, according to a release. The CFPB said it would supervise them to make sure they are complying with federal consumer financial law.

The bureau said that estimates based on Experian Automotive’s AutoCount database show the nonbank automobile financing market includes over five hundred lenders, but 90% of nonbank loans are made by fewer than 40 lenders.

In 2013, these companies provided financing to 6.8 million customers.

Legal experts say the expansion comes as no surprise.

Attorney Michael Thurman,  founder of Thurman Legal, told Auto Finance News,“The CFPB made clear that this was coming, that they would directly supervise the largest participants in the industry, and conduct on site examinations of those large participants, and really drill down to make sure those participants are implementing policies and procedures that help them become compliant.”

He said companies have been preparing for the increased oversight for some time now.

“Obviously it’s not a situation where they stop their efforts now, they’re going to continue to work hard to make sure they‘ve got procedures and methodologies in place to comply with CFPB rules,” said Thurman

The CFPB said in the proposed rule that the top tier of this market is dominated by the large captives. Other big companies in the nonbank auto finance market are either specialty finance companies or Buy Here Pay Here finance companies. The lower tiers of the nonbank market are comprised generally of smaller regional specialty finance companies.

“Nonbank auto finance companies extend hundreds of billions of dollars in credit to American consumers, yet they have never been supervised at the federal level,” said CFPB Director Richard Cordray in a release today.

He said the bureau took action after it uncovered auto-lending discrimination at banks it supervises.

“Today’s proposal would extend our oversight, allowing us to root out discrimination and ensure consumers are being treated fairly across this market,” Cordray said.

Legal experts say the new rule opens the door to onsite access to nonbank lender transactions and data.

“In an investigation context, where they provide a civil investigative demand, they were limited to the scope of the request they made,” said John Redding, partner at Buckley Sandler LLP. “So what this does is broaden what they can look at, at any given time.”

Redding said the new authority will broaden the CFPB’s ability to review the operations of the nonbank finance companies without having to run a formal investigation.

For now, the CFPB is not proposing to include automobile title lending or the securitization of automobile loans and leases within the meaning of the term “automobile financing” in this proposed rule, but it is seeking comment on this approach.

The proposed rule will be open for comment for 60 days beginning when the rule is published in the Federal Register.