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High-Level CFPB Officials Invite Companies to Address Prepaid Rule Through RFI for Adopted Regulations

We have learned from a reliable industry source that Brian Johnson, Senior Advisor to CFPB Acting Director Mulvaney, has invited companies and other stakeholders in the prepaid industry to address the Bureau’s prepaid rule, which was issued in October 2016 and amended in January 2018, by responding to the recent RFI on the Bureau’s adopted regulations. Kirsten Sutton, Acting Director Mulvaney’s Chief of Staff, reiterated the invitation this morning during her remarks at the American Banker Power of Prepaid Conference in Washington, DC.

The invitation gives new life to industry officials who interpreted the Bureau’s decision to finalize the prepaid rule amendments without any significant changes to the amendments as proposed by former Director Cordray to mean that Acting Director Mulvaney would not reconsider any part of the prepaid rule.

We surmise that Acting Director Mulvaney’s finalization of the prepaid rule amendments was based on the mistaken belief that industry concerns were largely addressed by the amendments proposed in June 2017.  Because the most recent comment period was limited to the proposed amendments, we believe that Acting Director Mulvaney did not have an opportunity to consider other aspects of the prepaid rule that were not addressed by the amendments, such as the inclusion of certain digital wallets and onerous restrictions on overdraft and credit features.

Because Mr. Johnson indicated that CFPB rulemaking resources will be prioritized and deployed in the near future , companies who want the CFPB to reconsider the prepaid rule (as it announced it plans to do with the payday and HMDA rules) should submit responses to the RFI well before the June 19, 2018 deadline.  We are working with clients and trade associations to submit responses to the various RFIs, including the RFI focusing on the adopted regulations.

Copyright © by Ballard Spahr LLP

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About this Author

James Kim, Ballard Spahr Law Firm, Los Angeles, Financial Law Litigation Attorney
Of Counsel

Mr. Kim advises companies and individuals in matters involving financial regulation and litigation, and the myriad of federal consumer financial laws, such as Title X of Dodd-Frank (UDAAP), TILA, RESPA, EFTA, and the FDCPA. He has represented clients in examinations and investigations with the Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), U.S. Department of Justice (DOJ), U.S. Securities and Exchange Commission (SEC), and various state and local agencies. His practice focuses on...

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Pavitra Bacon, Ballard Spahr Washington DC office, consumer financial services, regulatory compliance  class action litigation, government enforcement matters attorney
Associate

Pavitra Bacon counsels providers of consumer financial services, including banks, on regulatory compliance matters, and has successfully represented such providers in class action litigation and government enforcement matters. She advises clients on multifaceted regulatory issues related to student lending, mortgage origination and servicing, lender-placed insurance, information privacy, and credit cards. Her practice focuses on federal and state consumer protection laws, including the Truth-in-Lending Act (TILA); the Telephone Consumer Protection Act (TCPA); the Equal Credit Opportunity Act (ECOA); Unfair, Deceptive, or Abusive Acts or Practices (UDAAP); and the Fair Debt Collection Practices Act (FDCPA). She also assists clients with government investigations and subpoenas brought by the Consumer Financial Protection Bureau, U.S. Department of Justice, Office of the Comptroller of the Currency, Federal Reserve Board, Federal Housing Finance Agency, and state attorneys general, among others.

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