CFPB REGULATORY STATUS CHECK

On February 6, 2020 Kathleen Kraninger presented the Consumer Financial Protection Bureau’s (CFPB’s) Fall 2019 Semi-Annual Report to Congress, covering the period from .April 1, 2019, to September 30, 2019. The Report provides updates on a number of current regulatory efforts including, but not limited to:

Payday, Vehicle Title, and Certain High-Cost Installment loans

  • In February 2019, the CFPB released Notices of Proposed Rulemaking (NPRM) on the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Final Rule (2017 Final Rule) to delay the compliance date and to rescind requirements that lenders make certain underwriting determinations before issuing payday, single-payment vehicle title, and longer-term balloon payment loans.
    • The comment period on the reconsideration proposal closed on May 15, 2019. The CFPB is evaluating the comments, weighing the evidence, and will make its decision on the remaining proposal in accordance with applicable legal requirements, including the Administrative Procedure Act (APA).
  • In June 2019, the CFPB released a final rule: Payday, Vehicle Title, and Certain High-Cost Installment Loans; Delay of Compliance Date; Correcting Amendments, to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the regulation promulgated by the 2017 Final Rule. Compliance with these provisions of the 2017 Final Rule is delayed by 15 months, to November 19, 2020.

Request for Information: Remittances

  • In April 2019, the CFPB issued a Request for Information seeking input on two aspects of the CFPB’s Remittance Rule (Rule). The CFPB asked for information to:
    • To determine whether to propose changes to the impending expiration this July of a temporary exception in the Electronic Fund Transfer Act (EFTA), which permits insured depository institutions and credit unions to estimate the amount of currency that will be received by the designated recipient of a remittance transfer under certain circumstances.
    • On a safe harbor threshold in the Rule that helps to determine whether a person is providing remittances in the normal course of its business.
  • Although outside of the reporting period, the CFPB noted that in December 2019, the CFPB issued a NPRM which, if finalized, would:
    • Allow insured depository institutions and credit unions to continue to provide estimates for certain fees and exchange rate information included on disclosures under certain conditions.
    • Increase the safe harbor threshold that helps to determine whether a company makes remittance transfers in the normal course of its business and is subject to the Rule. If finalized, the increased safe harbor threshold would reduce burden on additional providers that send a relatively small number of remittances.
  • The comment period on this NPRM closed on January 21, 2020.

 Debt Collection Practices (Regulation F)

In May 2019, the CFPB issued the first NPRM to implement the requirements and prohibitions applicable to debt collectors under the Fair Debt Collection Practices Act (FDCPA) since it was passed in 1977. The proposal is intended to provide consumers with clear protections against harassment by debt collectors and straightforward options to address or dispute debts. Among other things, the NPRM would:

  • Set clear, bright-line limits on the number of calls debt collectors may place to reach consumers on a weekly basis;
  • Clarify how collectors may communicate lawfully using technologies, such as voicemails, emails and text messages, that have developed since the FDCPA’s passage in 1977; and
  • Require collectors to provide additional information to consumers to help them identify debts and respond to collection attempts.

The comment period on this proposal closed on September 18, 2019.

Home Mortgage Disclosure Act (HMDA)

  • In May 2019, the CFPB issued an ANPR seeking information to determine whether to propose changes to the data points that the CFPB’s 2015 HMDA rule added to Regulation C or revised to require additional information. Additionally, the CFPB solicited comments relating to the requirement that institutions report certain business-or commercial-purpose transactions under Regulation C. The ANPR sought information regarding the costs and benefits of these data points and reporting requirements. The comment period on the ANPR closed on October 15, 2019.
  • In May 2019, the CFPB issued an NPRM proposing to:
    • Amend Regulation C to increase the threshold for reporting data about closed-end mortgage loans to either 50 or 100 closed-end mortgage loans. (The CFPB has indicated that it anticipates issuing a separate final rule in 2020 addressing the NPRM’s proposed changes to the permanent thresholds.)
    • Extend for two years the temporary threshold of 500 open-end lines of credit for reporting data about open-end lines of credit and then set the threshold at 200 open-end lines of credit on January 1, 2022. (See below.)
    • Incorporate into Regulation C the interpretations and procedures from the interpretive and procedural rule that the CFPB issued on August 31, 2018, and implement further Section 104(a) of the EGRRCPA. (See below.)
  • In October 2019, the CFPB issued a final rule amending Regulation C to:
    • Adjust the threshold for reporting data about open-end lines of credit by extending to January 1, 2022, the current temporary threshold of 500 open-end lines of credit.
    • Incorporate into Regulation C the interpretations and procedures from the interpretive and procedural rule that the CFPB issued on August 31, 2018, and implements further Section 104(a) of the EGRRCPA.

 Ability-to-Repay and Qualified Mortgages

In July 2019, the CFPB issued an ANPR asking for information relating to the expiration of a provision of the temporary Government-Sponsored Entities (GSE) provision of the CFPB’s Ability-to­-Repay and Qualified Mortgage Rule.

  • Under that provision, mortgages which are eligible for purchase or guarantee by one of the GSEs and which satisfy certain statutory criteria relating primarily to features of the mortgage are generally deemed to be Qualified Mortgages (QMs). This provision is scheduled to expire in January 2021 and the CFPB’s ANPR sought information to determine whether to propose changes in the general definition of QM considering that expiration.
  • After reviewing comments submitted in response to the CFPB’s ANPR, the CFPB has decided to propose an amendment to the Rule which:
    • Would move away from adopting a Debt-to-Income threshold for such loans and instead include an alternative, such as a pricing threshold (i.e., the difference between the loan’s annual percentage rate and the average prime offer rate for a comparable transaction).
    • Extend the expiration of the GSE Patch for a short period until the effective date of the proposed alternative or until one or more of the GSEs exits conservatorship, whichever comes first.
  • The CFPB intends to issue, no later than May 2020, a NPRM seeking comment on these possible amendments.

 Residential Property Assessed Clean Energy

Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) amends the Truth in Lending Act (TILA) to mandate that the CFPB prescribe certain regulations relating to “Property Assessed Clean Energy” (PACE) financing.

  • In March 2019, the CFPB issued an Advance Notice of Proposed Rulemaking (ANPR) on PACE financing to facilitate the CFPB’s rulemaking process. As defined in EGRRCPA Section 307, PACE financing results in a tax assessment on a consumer’s real property and covers the costs of home improvements. The required regulations must carry out the purposes of TILA’s ability-to­-repay (ATR) requirements, currently in place for residential mortgage loans, with respect to PACE financing, and apply TILA’s general civil liability provision for violations of the ATR requirements the CFPB will prescribe for PACE financing. The EGRRCPA directs that such requirements account for the unique nature of PACE financing. The comment period on the ANPR closed on May 7, 2019.

TILA-RESPA Integration Disclosure Rule (TRID) Assessment

In November 2019, the CFPB issued a Request for Information seeking public input to inform the CFPB’s assessment of the TRID Rule, including the effectiveness of the rule in meeting the purposes and objectives of title X of the Dodd-Frank Act and the specific goals stated by the CFPB. The CFPB will conduct industry surveys as part of the assessment. The assessment, which is being conducted pursuant to Section 1022(d) of the Dodd-Frank Act, will be completed in Fall 2020.

 

 

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