CFPB Spring 2021 Regulatory Agenda Rejects Kraninger-Era Regulatory Plans – Consumer Protection
United States: CFPB Spring 2021 Regulatory Agenda Rejects Kraninger-Era Regulatory Plans
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The CFPB has published its Spring 2021 Regulatory Agenda as part of the unified program of federal regulatory and deregulation spring 2021. It represents the first regulatory program of the “new CFPB” during the Biden administration. The preamble to the agenda indicates that the information on the agenda is up to date as of April 26, 2021 and identifies regulatory matters that the Bureau “reasonably expects to have under consideration during the period from May 1, 2021 to April 30, 2021 ”.
Three important points that were listed as “long-term actions” in the Bureau’s fall 2020 rulemaking program, the latest program released under former director Kraninger, no longer appear in the spring 2021 program. First, there is no longer any reference to possible regulation to define the meaning of “abusive” under Dodd-Frank. Second, there is no longer any reference to possible payday loan disclosure regulations. Third, the new agenda does not contain any reference to possible rule making to address concerns that the Bureau’s current rule on loan originator compensation may be unduly restrictive.
The new agenda lists the following two items as in the “final phase of the rule”:
- Debt recovery. In April 2021, the CFPB published a proposal that would extend by 60 days the date of entry into force of Parts I and II of its final debt collection rule issued in October 2020 and December 2020 respectively. ‘is completed on May 19, 2021. The debt collection rule (Parts I and II) is expected to enter into force on November 30, 2021. The CFPB proposal would extend the effective date until January 29, 2022. The Bureau indicates in the agenda that its next action will be a rule as to the effective date.
- LIBOR. In June 2020, the CFPB proposed changes to Regulation Z to address the shutdown of the London Interbank Offered Rate (LIBOR) which is currently used by many creditors as an index to calculate the interest rate on credit cards. and other variable consumer rates. credit products. In 2017, the UK’s Financial Conduct Authority, the regulator that oversees the panel of banks on which LIBOR is based, announced that it would end LIBOR after 2021. The comment period has ended August 4, 2020. In the agenda, the Bureau indicates that it plans to publish a final rule in January 2022.
The items identified in the agenda as in the “proposed rule stage” are:
- Data on business loans (Regulation B). Section 1071 of Dodd-Frank amended the ECOA, subject to rules adopted by the Bureau, to require financial institutions to collect and report certain data in connection with credit applications made by businesses and small businesses owned by women or minorities. The Bureau published an SBREFA plan in September 2020 and convened an SBREFA panel in October 2020. In December 2020, the Bureau published the final report of the SBREFA panel. The Bureau’s next step will be the publication of a Notice of Regulatory Proposal (NPRM) for which the agenda gives an estimated date for September 2021.
- Amendments to FIRREA regarding assessments (automated assessment models). The Office participates in the development of interagency rules with the Federal Reserve, OCC, FDIC, NCUA and FHFA to develop regulations to implement the changes made by the Dodd-Frank Act to the 1989 Act on the reform, recovery and enforcement of financial institutions (FIRREA) regarding appraisals. The FIRREA amendments require implementing regulations for quality control standards for automated assessment models. The Bureau estimates in the agenda that agencies will publish an NPRM in December 2021.
- Mortgage Services COVID-19 Relief. In April 2021, the Bureau issued an NRPM to amend Regulation X in various ways to address the national COVID-19 emergency. The proposal would change aspects of early intervention requirements, loss mitigation procedures and foreclosure protections. The comment period on the NPRM ended on May 10, 2021, and the Bureau considers it on the agenda that it will issue a final rule in July 2021.
The points identified in the agenda as in the “pre-settlement phase” are:
- Consumer access to financial information. Section 1033 of Dodd-Frank deals with the rights of consumers to access information about their own financial accounts, and allows the CFPB to prescribe rules regarding how a supplier of consumer financial products or services must post information about their own financial accounts. a consumer’s account available to them, “including information relating to any transaction, or series of transactions, about the account, including costs, fees and usage data.” In November 2016, the Bureau released a request for information (RFI) on market practices related to consumer access to financial information and, after holding a symposium in February 2020, the Bureau issued an advance notice of proposed regulations related to its regulation under Article 1033. in November 2021. In the agenda, the Bureau gives an estimated date of April 2022 for its next pre-regulatory steps.
- Clean energy financing valued by property. In March 2019, the CFPB issued an Advance Regulatory Proposal to extend the repayment capacity requirements of the Truth in Lending Act to PACE transactions. The Bureau gives an estimate of October 2021 in the agenda for the pre-regulatory activity.
The items identified in the agenda as “long-term actions” for which no estimated date for other actions is given are:
- Mortgage loan management rules. The Bureau is considering proposing additional changes to the service rules, including, for example, provisions relating to loss mitigation.
- Artificial intelligence. In February 2017, the CFPB published an RFI regarding the use of alternative data and modeling techniques in the credit process. The Bureau says it recognizes the importance of continuing to monitor the use of AI and machine learning and assesses “whether rule making, a policy statement or other Bureau actions can become appropriate ”.
Pursuant to Dodd-Frank Section 1022 (d), the Bureau is required to conduct an assessment of each significant rule or ordinance it adopts under a federal consumer finance law and to issue an report of each assessment no later than 5 years after the adoption of the rule or ordinance. effective date. As part of the release of the Spring 2021 schedule, the CFPB has announced that it will assess the significant changes made in October 2015 to Regulation C under the Home Mortgage Disclosure Act.
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