CFPB Publishes Spring 2019 Rulemaking Agenda
The CFPB has published its Spring 2019 rulemaking agenda as part of the Spring 2019 Unified Agenda of Federal Regulatory and Deregulatory Actions, which is coordinated by the Office of Management and Budget (OMB). It represents the CFPB’s first rulemaking agenda under Director Kraninger’s leadership. The agenda’s preamble indicates that the information in the agenda is current as of March 6, 2019 and identifies the regulatory matters that the Bureau “reasonably anticipates having under consideration during the period from May 1, 2019 to April 30, 2020.”
Perhaps most noteworthy is that there is no mention in the preamble or elsewhere of the Bureau’s plans to engage in an ECOA rulemaking regarding disparate impact. The preamble to the Fall 2018 agenda stated that the future activity being considered by the Bureau included “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 referenced 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.
Also particularly noteworthy is that the Bureau’s rulemaking to implement Section 1071 of the Dodd- Frank Act is now listed as a current item. 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. While previously classified in the Bureau’s semi-annual rulemaking agendas as a current rulemaking, the Bureau’s Fall 2018 agenda reclassified the Section 1071 rulemaking as a long-term action item. The Spring 2019 restores the Section 1071 rulemaking to current rulemaking status, with January 2020 indicated as the date for pre-rule activity.
In the agenda’s preamble, the CFPB states that it “intends to recommence work later this year to develop rules to implement section 1071 of the Dodd-Frank Act.” It also states that it “delayed rulemaking to implement this provision pending implementation of the Dodd-Frank Act amendments to HMDA and started work on the project after the HMDA rules were issued in 2015. The Bureau decided to pause work on section 1071 in 2018 in light of resource constraints and the priority accorded to various HMDA initiatives. The Bureau expects that it will be able to resume pre-rulemaking activities on the section 1071 project within this next year.” (The California Reinvestment Coalition has filed a lawsuit against the CFPB in a California federal district court seeking a declaration that the CFPB’s failure to issue regulations implementing Section 1071 violates the Administrative Procedure Act and requiring the CFPB to promptly issue such regulations.)
Among the current rulemakings listed in the agenda are the CFPB’s proposals to rescind the ability to repay provisions of its final payday/auto title/high-rate installment loan rule (Payday Rule) and to delay the Payday Rule’s August 19 compliance date. Regarding those proposals, the CFPB states only that it “expects to issue a final rule concerning the compliance date in summer 2019 and a final determination on reconsideration thereafter.” (It should be noted that pursuant to a memorandum issued by OMB in April 2019, as of May 11, CFPB final rules became subject to a new review process conducted by the Office of Information and Regulatory Affairs, a part of OMB.)
PACE financing. In March 2019, the CFPB issued an advance notice of proposed rulemaking to solicit information on Property Assessed Clean Energy (PACE) financing.
HMDA. In May 2019, the CFPB issued both a proposed HMDA rule and an advance notice of proposed HMDA rulemaking. The issues covered by the proposed rule include the volume threshold that triggers reporting of closed-end mortgage loans. The ANPR deals with the data points for HMDA reporting. In January 2019, the CFPB issued final policy guidance regarding the application-level HMDA data that will be made available to the public. It estimates that it will issue an NPRM in December 2019 regarding public disclosure of HMDA data.
TILA/Mortgage escrows. The CFPB expects to engage in prerule activity in November 2019 regarding the creation of an exemption from the escrow requirements for certain “higher-priced mortgage loans” for certain creditors with assets of $10 billion or less and meeting other criteria.
Remittance transfers. In May 2019, the CFPB issued a notice and request for comments seeking information to inform its consideration of possible changes to its rule on remittance transfers.
Regulation CC (Expedited Funds Availability Act). In December 2018, the CFPB (jointly with the Federal Reserve Board with which the CFPB shares EFA Act rulemaking authority pursuant to Dodd-Frank) reopened the comment period on a 2011 Fed proposal to revise certain portions of Reg. CC dealing with funds availability.) In addition, the CFPB and Fed expect to jointly issue a final rule by June 2019 to implement the statutory requirement to adjust for inflation dollar amounts in the EFA Act.
The long-term actions items listed in the Spring 2019 agenda include consideration of “whether rulemaking or other activities may be helpful to further clarify the meaning of abusive acts or practices under section 1031 of the Dodd-Frank Act.” Other items included on the CFPB’s list of long-term actions include:
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 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 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 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.”
All of the above long-term items were also listed in the Bureau’s Fall 2018 rulemaking agenda. In the preamble to the new agenda, the CFPB states that its leadership “is considering further prioritization and planning of the Bureau’s rulemaking activities, both with regard to substantive projects and modifications to the processes that the Bureau uses to develop and review new regulations.” Among the sources on which the Bureau is drawing for this effort are “ideas gathered by an internal task force on burden reduction, suggestions submitted during the 2018 Call for Evidence initiative, and feedback the Bureau has received during its current listening tour.” It states that while this evaluation is underway, except with respect to the Section 1071 rulemaking, it has decided not to revise its current list of long-term items. (An item that is no longer mentioned in the CFPB’S agenda is “larger participant” rules. The CFPB designated that item as “inactive” when it issued its Spring 2018 rulemaking agenda.)
Finally, the Bureau notes in the preamble to the Spring 2019 agenda that “it is working on various initiatives to address issues in markets for consumer financial products and services that are not reflected in this notice because the Unified Agenda is limited to rulemaking activities.”