The Consumer Financial Protection Bureau (CFPB or Bureau) under Director Kathleen Kraninger has maintained a steady, albeit slower, pace on regulatory initiatives. The COVID-19 public health crisis has divided the Bureau's attention between its guidance and action in response to the COVID-19 emergency and the Bureau's existing regulatory agenda (which was set prior to the crisis). The Bureau's "business as usual" regulatory work has focused on deregulation and addressing major upcoming changes to the financial industry.
The CFPB's Spring 2020 Rulemaking Agenda continues to focus on the Bureau's stated goal of "maximizing informed consumer choice and reducing unwarranted regulatory burden," which guides the Bureau's assessments and certain rulemaking efforts. A major deregulatory initiative entered the final stages this summer when the Bureau promulgated its final Payday Rule, rescinding the Mandatory Underwriting Provisions in the Rule. The CFPB now has debt collection and mortgage issues on the horizon, with the final Debt Collection Rule expected later this year, and a proposal to reconsider aspects of the Home Mortgage Disclosure Act's implementing regulation.
The CFPB also has several current and forthcoming proposals related to upcoming changes to core aspects of certain financial industries. This includes proposals to address qualified mortgage (QM) rules and the expiration of the GSE QM Patch Qualified Mortgages. And the CFPB is also addressing the anticipated discontinuation of LIBOR by proposing examples of replacement indices that meet Regulation Z requirements.
As an agency, the CFPB has already had an interesting year, with the Supreme Court determining that the Bureau's structure was unconstitutional and modifying the Dodd-Frank Act to make the CFPB director removable at will by the president. Existing regulations appear to be safe — Director Kraninger issued a ratification of nearly all regulations (excluding the rescinded section of the Payday Rule and the Arbitration Rule). Of course, the Supreme Court's decision on the constitutionality issue and appropriate relief creates a level of uncertainty around the Bureau's rulemaking agenda in an election year.
Ongoing Efforts on New Regulations and Initiatives: The Bureau plans to work on proposals and final rules through the spring of 2021 in the following areas:
- Fair Debt Collection Practices Act (FDCPA): The Bureau expects to take final action in October 2020 regarding a May 2019 NPRM that would prescribe rules under Regulation F to govern the activities of debt collectors, as that term is defined under the Fair Debt Collection Practices Act. The rule would address communications in connection with debt collection; interpret and apply prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection; and clarify requirements for certain consumer-facing debt collection disclosures.
- Qualified Mortgages: The CFPB has proposed two rules related to the upcoming expiration of the so-called GSE QM Patch. Additionally, the Bureau is considering adding a new "seasoning" definition of qualified mortgages (QM), which would be issued through a separate NPRM. The definition would create an alternative pathway to QM safe-harbor status for certain mortgages when the borrower has consistently made timely payments for a period.
- LIBOR: The CFPB has issued a proposal to address the anticipated discontinuation of LIBOR and to facilitate compliance by open-end and closed-end creditors.
- Smaller Institution Regulatory Relief: The Bureau issued a proposal that would exempt certain insured depository institutions and insured credit unions from the requirement to establish escrow accounts for certain higher-priced mortgage loans.
- Home Mortgage Disclosure Act (HMDA): The Bureau expects to issue two new rules under HMDA in fall of 2020. The first rule addresses certain data points that are reported under the 2015 HMDA rule and coverage of certain business or commercial purpose loans. The second rule addresses the public disclosure of HMDA data in light of consumer privacy interests.
- Small Business Reporting: The Bureau expects to issue an NPR in September 2020 on section 1071 of the Dodd-Frank Act, which amended the Equal Credit Opportunity Act to require financial institutions to collect, report, and make public certain information concerning credit applications made by women-owned, minority-owned, and small businesses. The release follows the Bureau's 2017 request for information and 2019 symposium on small business data collection. Prior to implementing the rule, the Bureau will convene a panel under the Small Business Regulatory Enforcement Fairness Act (SBREFA) to determine how the implementation of the rule will impose costs.
- Additional Rulemaking Activity: Other rulemaking efforts include:
- implementation of appraisal rule amendments related to automated valuation models under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA),
- implementation of interagency guidance stating that supervisory guidance does not have the force and effect of law, and
- finalization of rules regarding Disclosure of Records and Information.
Continued Assessment of Existing Regulations: The Bureau continues to review and conduct ongoing assessments of the following areas:
- TRID: The Bureau is conducting an assessment of its Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) Rule and will issue its TRID Rule assessment report no later than October 2020.
- CARD Act Rules: The Bureau is conducting a review of Regulation Z rules that implement the Credit Card Accountability Responsibility and Disclosure Act of 2009.
- PACE Financing: The Bureau is continuing to engage stakeholders regarding implementing the Truth in Lending Act's (TILA) ability-to-pay requirements and general civil liability provisions for violations, already in place for residential mortgage loans, for PACE financing.