Recently the CFPB published the Fall 2015 version of its Semi-Annual Agenda. As expected, it is full of changes that will occupy us for years to come.
Arbitration – The CFPB is in the early phases of the rulemaking process to address concerns related to the use of arbitration agreements in connection with credit cards, deposit accounts, payday loans and various other consumer financial products or services. The agency may prevent companies from using these agreements to foreclose consumers’ ability to bring class action lawsuits and may require that arbitration filings and awards be submitted to the Bureau. Many financial institutions do not use arbitration agreements.
Payday, auto title, and similar lending products – The CFPB is developing a Notice of Proposed Rulemaking to address concerns in markets for payday, auto title, and similar lending products. The primary concern is that some lenders offer these products without assessing the consumer’s ability to repay, thereby forcing consumers to choose between reborrowing, defaulting, or falling behind on other obligations. There is also concern about certain payment collection practices that can subject consumers to substantial fees and increase risk of account closure. The rulemaking proposal is expected in first quarter 2016. Many financial institutions do not offer these products.
Prepaid accounts – General purpose reloadable cards and other similar prepaid products are increasingly being used by consumers in place of traditional checking accounts or credit cards, but they do not always carry important consumer protections. In December 2014 the CFPB proposed rules that prepaid accounts receive certain protections that are similar to those that exist now for debit and payroll cards. The proposal also extended general credit card protections to prepaid accounts that access overdraft services or offer certain credit features. The final rule is expected in spring 2016.
Overdrafts – The CFPB is preparing for a rulemaking concerning overdraft programs on checking accounts. Major concerns involve consumers consent (or “opt in”) to overdraft coverage for certain electronic transactions, overdraft coverage limits, transaction posting order practices, overdraft and insufficient funds fee structures, and involuntary account closures. Regulations that took effect in 2010 require that consumers opt in before banks can charge overdraft fees for ATM and one-time debit card transactions, but opt in rates vary widely. The publication date for the proposed regulations is uncertain.
Debt collection – The CFPB is conducting research for a rulemaking on debt collection activities, which are the single largest source of complaints to the federal government of any industry. New rules are expected, but not in the immediate future. The impact on financial institutions is uncertain.
Women-owned, minority-owned, and small businesses data collection – The Dodd-Frank Act required final rules on this subject by July 2011; obviously the CFPB has been delayed. The rules will require financial institutions to report information about lending to women-owned, minority-owned, and small businesses. The agency is building off the final HMDA rule released this fall. The delivery date for proposed rules is not clear. These rules should be a major concern for all financial institutions.
Mortgage servicing – The CFPB proposed rules in December 2014 to amend certain aspects of existing servicing rules. The proposal addressed, among other things, enhanced loss mitigation requirements and compliance with certain rules when the borrower is a potential or confirmed successor in interest or is in bankruptcy. A final rule is expected in mid-2016. Many small financial institutions are exempt from current servicing rules; hopefully that exemption continues.
Home Mortgage Disclosure Act – In October 2015, the CFPB issued a final rule amending Regulation C to implement amendments to the Home Mortgage Disclosure Act made by the Dodd-Frank Act. The agency is preparing a compliance guide and other support materials and programs to prepare for implementation of various parts of the rule starting in 2017 and 2018.
Credit reporting – Information in credit reports can be critical to determine a consumer’s eligibility for credit, access to checking accounts, employment, rental housing, and more. The CFPB is evaluating additional rules or amendments to existing rules governing consumer reporting. Potential topics for consideration might include the accuracy of credit reports, including the processes for resolving consumer disputes, or other issues.
Student loan servicing – Student loan servicers are a critical link between borrowers and lenders, yet there are no consistent, market-wide federal standards for student loan servicing. New rules would likely address specific acts or practices and consumer disclosures.