As expected, and as we discussed in our recent “Compliance Expectations for the New Administration” webinar, the Biden administration is effecting changes in financial oversight that will impact financial institutions. One of those changes included, at the request of President Biden, was the resignation of CFPB Director Kathy Kraninger and the appointment of Dave Uejio as Acting Director of the CFPB; Acting Director Uejio will serve until President Biden’s nominee for CFPB Director, Rohit Chopra, is confirmed by the Senate.
On February 4, 2021, Acting Director Uejio issued a letter to the Division of Research, Markets, and Regulations (RMR) outlining his policy priorities for the CFPB as “…(1) relief for consumers facing hardship due to COVID-19 and the related economic crisis and (2) racial equity.” Uejio also stated he is “…asking RMR to focus rulemaking on the pandemic response and to preserve, where possible, maximum policy flexibility for the president’s nominee once confirmed.” Two ways he plans to accomplish this is by:
- Focusing mortgage servicing rulemaking on pandemic response to avert a foreclosure crisis when the COVID-19 forbearances end in March and April; and
- Explore options for preserving the status quo with respect to QM and debt collection rules.
Additionally, Acting Director Uejio expressed the need to support small businesses by enforcing laws that protect them and pledged support to implement section 1071 of the Dodd Frank Act (small business data collection). He also asked the RMR to analyze housing insecurities (i.e. mortgage foreclosures, mobile home repossessions, landlord-tenant eviction) and consumer finance barriers to racial equity, and resume data collections paused at the beginning of the pandemic (i.e. HMDA quarterly reporting and the CARD Act data collection, as well as the previously completed 1071 data collection and the ongoing PACE data collection).
Most pressing for bankers is the possibility of preserving the status quo with respect to QM and debt collection rules as these have effective dates in 2021, especially the QM rules set to be effective on March 1, which will affect most creditors. Preserving policy flexibility is not new, in fact, the Biden administration has already taken strides to ensure such flexibility through a memorandum it issued on Regulatory Freeze Pending Review. However, if anything is going to change, especially in regards to the QM rules, those changes need to be announced soon, so banks know what is expected and have time to prepare appropriately.