October 14, 2019

October 14, 2019

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CFPB Fall 2018 Rulemaking Agenda Confirms Plans To Consider Rulemaking On Abusiveness Standard

The CFPB’s Fall 2018 rulemaking agenda has been published by the Office of Information and Regulatory Affairs (OIRA) as part of its Fall 2018 Unified Agenda of Federal Regulatory and Deregulatory Actions.  (OIRA is part of the Office of Management and Budget.)  It represents the CFPB’s second rulemaking agenda under the Trump Administration and Acting Director Mick Mulvaney’s leadership.  The agenda’s preamble indicates that the information in the agenda is current as of August 30, 2018 and identifies the regulatory matters that the Bureau “reasonably anticipates having under consideration during the period from October 1, 2018, to September 30, 2019.”

As signaled by Mr. Mulvaney in comments made earlier this week, the preamble indicates that the Bureau is considering “how rulemaking make be further helpful to further clarify the meaning of ‘abusiveness’ under section 1031 of the Dodd-Frank Act.”  Such rulemaking is included on the CFPB’s list of “long-term actions” that is part of the unified agenda.

The preamble further states that the future activity being considered by the Bureau includes “reexamining the requirements of the Equal Credit Opportunity Act (ECOA) in light of recent Supreme Court case law and the Congressional disapproval of a prior Bureau bulletin concerning indirect auto lender compliance with ECOA and its implementing regulations.”  The preamble references the CFPB’s May 2018 statement that was issued following such Congressional disapproval in which the CFPB announced that it was reexamining the ECOA requirements.  However, unlike the “abusiveness” rulemaking, the ECOA rulemaking is not included on the CFPB’s list of long-term actions or otherwise listed in its rulemaking agenda.

With regard to the CFPB’s rulemaking to reconsider its final payday/auto title/high-rate installment loan rule (Payday Rule), the Fall 2018 agenda estimates the issuance of a notice of proposed rulemaking (NPRM) in January 2019.  (The Spring 2018 rulemaking agenda had estimated issuance of a NPRM in February 2019.)  The Payday Rule’s compliance date is August 19, 2019.  In the preamble, the CFPB states that it expects to issue a NRPM “by no later than early 2019 that will address reconsideration of the rule on the merits as well as address changes to its compliance date.”

In addition to reconsidering the Payday Rule, the other key rulemaking initiatives listed on the Spring 2018 agenda are:

  • Debt Collection. The agenda states that the Bureau “expects to issue [a NPRM] addressing such issues as communication practices and consumer disclosures by spring 2019.”  It estimates the issuance of a NPRM in March 2019.

  • Business Lending Data.  Dodd-Frank Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  Such data includes the race, sex, and ethnicity of the principal owners of the business.  In May 2017, the CFPB issued a RFI and a white paper on small business lending in conjunction with a field hearing on small business lending.  In the Spring 2018 agenda, the Section 1071 rulemaking was included in the list of current rulemakings, with an estimated March 2019 date for prerule activities. The Fall 2018 agenda reclassifies the Section 1071 rulemaking as a long-term action item.  In the preamble, the CFPB attributes the rulemaking’s new status to the Bureau’s “need to focus additional resources on various HMDA initiatives.”

  • HMDA/Regulation C.  The CFPB states that it expects to issue final guidance in late 2018 to govern the disclosure of loan-level HMDA data in 2019.  However, to address HMDA data disclosure in future years, the CFPB states that it has decided to add a new notice-and-comment rulemaking to its agenda and estimates a May 2019 date for issuance of a NRPM.  The agenda estimates a March 2019 date for the CFPB’s issuance of a NRPM “to address some or all” of the issues related to various HMDA projects under consideration, such as revisiting the Bureau’s 2015 HMDA rule and its August 2018 interpretive rule regarding amendments made to HMDA by the Economic Growth, Regulatory Relief, and Consumer Protection Act.

In addition to DFA Section 1071 rulemaking, the key long-term actions items listed in the Fall 2018 agenda are:

  • Inherited Regulations.  These are the existing regulations that the CFPB inherited from other agencies through the transfer of authorities under the Dodd-Frank Act.  The CFPB indicates that it expects to focus its initial review on the subparts of Regulation Z  that implement TILA with respect to open-end credit and credit cards in particular. By way of example, the CFPB states that it expects to consider adjusting rules concerning the database of credit card agreements it is required to maintain by the CARD Act “to reduce burden on issuers that submit credit card agreements to the Bureau and make the database more useful for consumers and the general public.” The CFPB states it may launch additional projects after reviewing the responses it received to its RFIs on the inherited regulations and rules issued by the CFPB.

  • Consumer reporting.  The Fall 2018 agenda indicates that the Bureau will evaluate potential additional rules or amendments to existing regulations governing consumer reporting, with possible topics for consideration to include the accuracy of credit reports, including the processes for resolving consumer disputes, identity theft, or other issues.

  • Consumer Access to Financial Records.  In November 2016, the CFPB issued a RFI about market practices related to consumer access to financial information.  The Fall 2018 agenda states that the Bureau will continue to monitor market developments and evaluate possible policy responses to issues identified, including potential rulemaking.  Possible topics the Bureau might consider include specific acts or practices and consumer disclosures. In addition, the Bureau plans to consider “whether clarifications or adjustments are necessary with respect to existing regulatory structures that may be implicated by current and potential developments in this area.”

  • Regulation E Modernization.  The Fall 2018 agenda states that the Bureau “will evaluate possible updates to the regulation, including but not limited to how providers of new and innovative products and services comply with regulatory requirements” and that “potential topics for consideration might include disclosure provisions, error resolution provisions, or other issues.”

Three items no longer mentioned in the CFPB’S agenda are overdrafts, “larger participant” rules, and student loan servicing.  The CFPB designated these items as “inactive” when it issued its Spring 2018 agenda.

Copyright © by Ballard Spahr LLP

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About this Author

Barbara S. Mishkin, Ballard Spahr, Philadelphia, Deceptive Practices Lawyer, Fair Debt Collection Practices Act, Gramm Leach Bliley
Of Counsel

Barbara Mishkin focuses on consumer compliance and banking law. The federal laws with which Ms. Mishkin has dealt extensively include the Truth in Lending Act, Equal Credit Opportunity Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, and Gramm-Leach-Bliley Act. She also has significant experience with state usury and lender licensing laws, as well as state laws prohibiting unfair and deceptive acts and practices.

American Bar Association, member, Consumer Financial Services Committee;...

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