The Bureau of Consumer Financial Protection's ("BCFP" or "Bureau") Fall 2018 Rulemaking Agenda follows the course set in their Spring 2018 Agenda with an emphasis on implementing statutory directives, reexamining past rulemaking, and analyzing the responses to the "Call for Evidence" initiative. The Bureau's discussion of its regulatory agenda includes the Bureau's current priorities, or "workstreams," which it expects to continue to refine. Highlights of the Bureau's agenda and future planning include a notice of proposed rulemaking ("NPRM") on debt collection, an exploration of a disparate impact rulemaking, and plans to clarify the term "abusive."
Continued Assessments of Prior "Significant" Rulemakings – Section 1022(d) of the Dodd Frank Act ("DFA") requires the Bureau to conduct an assessment of each significant rule or order adopted by the Bureau, in order to review the effectiveness of the rule or order in meeting the objectives of the DFA and the specific goals stated by the Bureau.
The Bureau plans to complete its Section 1022(d) "look backs" in 2019 for the following rules:
- the Remittance Rule;
- 2013 Real Estate Settlement Procedures Act ("RESPA") Mortgage Servicing Rule; and
- The Ability-to-Repay-Qualified Mortgage Rule ("ATR-QM").
The Bureau expects to begin assessing the Truth in Lending Act ("TILA")-RESPA Integrated Disclosure Rule ("TRID", or the "Know Before You Owe" Rule) in 2019. The Bureau also identifies rules that will need to be updated following the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 ("EGRRCPA").
Equal Credit Opportunity Act ("ECOA") and Disparate Impact – In May 2018, the Bureau announced that it was "reexamining the requirements" of ECOA "concerning the disparate impact doctrine" in light of the recent Supreme Court jurisprudence (Texas Department of Housing & Community Affairs v. The Inclusive Communities Project, Inc., addressing disparate impacts under the Fair Housing Act) and the Congressional disapproval of a prior Bureau indirect auto lender bulletin with ECOA and its implementing regulations. The Bureau's introduction to the Agenda reaffirms that the Bureau is considering a rulemaking pertaining to the disparate impact theory under ECOA, but no action is specifically included in the Agenda itself.
Defining "Abusiveness" Through Rulemaking – The Fall 2018 Agenda officially provides that the Bureau is now considering how rulemaking could clarify the meaning of "abusiveness" under Section 1031 of the Dodd-Frank Act. "Abusiveness," along with other the expansiveness of the other elements of the Bureau's unfair, deceptive, or abusive practices ("UDAAP") authority have been described by Acting Director Mulvaney as problematic, allowing the Bureau to "push the envelope" in enforcement rather than remaining within statutory boundaries. In a speech to the Mortgage Bankers Association annual conference, acting Director Mulvaney expressed his preference for "clearer rules of the road" over "[r]egulation by enforcement."
Nonetheless, around the same time as the publication of the Rulemaking Agenda, and the Acting Director's remarks, the Bureau brought an enforcement action against a small-dollar lender under the "abusive" prong of UDAAP. This legal action continued a long line of "abusive" cases brought in the Cordray era.
Significant Items on the Active Agenda:
- Ability to Repay Rule and PACE – The Bureau is expecting to complete an assessment of its 2013 rules for assessing consumers' ability to repay mortgage loans by January 2019. The Bureau's agenda states that it intends to develop standards for assessing consumers' ability to repay Property Assess Clean Energy ("PACE") financing via rulemaking.
- Debt Collection – The Agenda indicates that the Bureau will proceed with its rulemaking efforts regarding debt collection. According to the Agenda, an NPRM on this topic should be issued by March 2019, and will address "such issues as communication practices and consumer disclosures."
- Fair Credit Reporting Act ("FCRA") – As a part of its efforts to implement the EGRRCPA, the Bureau issued an interim final rule adjusting certain model forms under the Fair Credit Reporting Act. The rule provides various options for amending the affected disclosures to inform consumers that recent amendments to the FCRA created a right to obtain a free "security freeze" from nationwide consumer reporting agencies and extended the length of initial "fraud alerts" that consumers may place on their files with nationwide consumer reporting agencies from 90 days to one year. The interim final rule takes effect on September 21, 2018, but the Bureau is seeking comment on the changes and underlying disclosures.
- Home Mortgage Disclosure Act ("HMDA") – The Bureau issued an interpretive and procedural rule to provide clarification regarding EGRRCPA amendments and the HMDA. Additional rulemaking has been added to the Agenda to modify or require modification of public HMDA data to protect consumer privacy interests. The Bureau's final guidance governing public disclosure requirements for 2018 HMDA data should also be issued in the next few months. Additional HDMA projects, including the threshold for collecting and reporting HMDA data with respect to open-end lines of credit and the incorporation of the EGRRCPA into Regulation C, will be addressed by an NPRM in spring 2019.
- Mortgage Escrow Requirements – The Fall Rulemaking 2018 Agenda includes rulemaking to exempt certain creditors with assets of $10 billion or less from certain mortgage escrow requirements under the Dodd-Frank Act as a future project.
- Payday, Vehicle Title, and Certain High-Cost Installment Loans – The Bureau had already announced in January 2018 that the "Payday Rule" will be reconsidered. According to the Agenda, an NPRM should be issued no later than early 2019. And will address reconsideration of the rule on the merits as well as changes to its compliance date.
- TILA and RESPA – The Agenda states that certain regulations integrating mortgage disclosures under TILA and RESPA will be clarified with additional Bureau guidance.
Delayed Items:
- Disclosure of "CSI" – The Bureau published a final rule regarding the disclosure of records and information covering information sought through the Freedom of Information Act ("FOIA"), the Privacy Act or 1974, and through legal process. However, the final rule does not address the Bureau's proposals regarding information obtained by the Bureau through its supervisory or enforcement roles. The Bureau's proposal, discussed in more detail here, would generally expand other state and federal agencies' access to confidential supervisory information ("CSI") and confidential investigative information ("CII") about institutions regulated and supervised by the Bureau.
- Section 1071 - ECOA – The implementation timeline for Section 1071 of the Dodd Frank Act has been reclassified from pre-rule status to longer-term action status. As discussed in more detail here, Section 1071 requires financial institutions to collect, report, and make public certain information concerning credit applications made by women-owned, minority-owned, and small business.
Removed Items:
The Bureau had previously marked as "inactive" rulemaking activities covering overdrafts, the larger participant rules, and student loan servicing. These items have not been removed from the Agenda.
While the Bureau's rulemaking efforts have slowed, they have not stopped. The Bureau's various look-backs and reconsiderations provide industry participants the opportunity to engage (or re-engage) on various rules to help shape the Bureau's approach moving forward. For rules now some years in effect, industry participants can provide data and evidence to support changes in the rules.