CFPB's reduced regulatory agenda, new FTC commissioners making news, and more in this issue of Consumer Financial Services Practice Digest
New CFPB Management Unveils a Reduced Regulatory Agenda
New management at the CFPB plans fewer rulemakings, according to its spring 2018 regulatory agenda, the first submitted by Acting Director Mick Mulvaney. Why It Matters: Citing interim leadership pending the appointment and confirmation of a permanent director, CFPB leadership is prioritizing, during the coming months: meeting specific statutory responsibilities, continuing selected rulemakings that were already under way, and reconsidering two regulations issued under the prior leadership.
New FTC Commissioners Making News
The FTC, the agency with responsibility for consumer protection law enforcement over nonbanks offering consumer financial products and services, has five new commissioners. In addition to overseeing the work of the FTC's Division of Financial Practices, the new commissioners will soon need to address the working relationship between the two agencies under the terms of the Consumer Financial Protection Act, which charges each with avoiding duplication of federal law enforcement and regulatory efforts. The MOU between the FTC and the CFPB, entered in March 2015, was extended in March 2018 until June 6 2018, while under review by the agencies.
Debt Collection CFPB Regulatory Update
The regulation of debt buyers and collectors continued at the Consumer Financial Protection Bureau (CFPB) during 2017. The two most significant CFPB developments were (1) the announcement of a bifurcated debt collection rulemaking and (2) the resignation of Richard Cordray as director of the CFPB and the subsequent presidential appointment of Mick Mulvaney as acting director, which is being disputed in court. The CFPB also announced law enforcement actions involving the debt collection practices of servicers, debt settlement companies, and collection law firms—an area that continues to attract intense scrutiny. The CFPB continued its practice of issuing supervisory highlights and reports on research on debt collection, and filing amicus briefs.
Constitutional Issues with Administrative Adjudication
Article II, Section 2, Clause 2 of the United States Constitution, the Appointments Clause, states in part that "Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments."
On April 23, 2018, the Supreme Court heard oral argument in Lucia v. SEC. Lucia is an Appointments Clause case that has its most immediate roots in the Dodd-Frank Act, which expanded the powers of the Securities and Exchange Commission in its administrative forum, and set up a similar adjudicatory framework for the Consumer Financial Protection Bureau (CFPB). As the SEC and CFPB began to exercise their authority in these administrative forums, affected parties began to push back, citing the expedited nature of the forum, lack of procedural and evidentiary standards, bias concerns, and constitutional issues.
CFPB Requests for Information Tracker
The CFPB has published in the Federal Register a series of Requests for Information (RFIs) seeking comment on enforcement, supervision, rulemaking, market monitoring, and education activities. The RFIs will provide an opportunity to submit feedback and suggest ways to improve outcomes for both consumers and covered entities.
May 22, 2018: "How Blockchain Is Changing the Entertainment Industry," Venable's Los Angeles office and webinar
May 23, 2018: "Consumer Financial Protection Bureau (CFPB) Today - Trends and Enforcement" hosted by ACC
July 24, 2018: "CFPB/FTC Debt Collection Update," ACA International 2018 Convention
Lucia v. SEC – What Does This Decision Mean for Regulated Businesses?
On May 15, members of Venable's Consumer Financial Services, Securities Enforcement, and Regulatory Practices shared their experiences from the front lines, offered insights into this constitutional question, and discussed the practical implications for parties that litigate before the CFPB or SEC. To listen to a recording of the program and view the corresponding slides, please click here. A copy of the presentation can be downloaded by clicking here.
The Chief Compliance Officer Perspective
Venable counsel Alexandra Megaris moderated a session, "The Chief Compliance Officer Perspective," at COMPLY2018, The RegTech and Compliance Conference, on May 17, 2018. During this session, guests learned practical approaches to the challenges and changes arising from new technologies from three prominent chief compliance officers (CCOs). A few of the challenges faced by CCOs that were discussed include third-party risks, new regulations, global expansion, and ever-changing regulatory environments. Attendees learned how CCOs are overcoming these competing demands to keep their organizations ahead of risk while staying ahead of the competition. To view the handout, click here.