CFPB publishes Fall 2020 rulemaking agenda | Ballard Spahr LLP

The CFPB has published its Fall 2020 rulemaking agenda as part of the Fall 2020 Unified Agenda of Federal Regulatory and Deregulatory Actions.  It represents the CFPB’s fourth rulemaking agenda under Director Kraninger’s leadership.  The agenda’s preamble indicates that the information in the agenda is current as of September 11, 2020 and identifies the regulatory matters that the Bureau “reasonably anticipates having under consideration during the period from November 2020 to November 2021.”

The Bureau issued its final debt collection rule in October 2020.  In February 2020, the Bureau issued a supplemental proposal that would require debt collectors to make specified disclosures when collecting time-barred debts.  The Bureau indicates in the preamble that it plans to finalize its supplemental proposal regarding disclosures for time-barred date this month.

Other items listed in the agenda on which the CFPB expects to take action before the end of this year and next year include:

  • Business Lending Data (Regulation B).  Section 1071 amended the ECOA, subject to rules adopted by the Bureau, to require financial institutions to collect and report certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  The Bureau issued a SBREFA outline in September 2020 and convened a SBREFA panel in October 2020.  The Bureau released the panel report today.
  • Property Assessed Clean Energy Financing.  In March 2019, the CFPB issued an Advance Notice of Proposed Rulemaking to extend Truth in Lending Act ability-to-repay requirements to PACE transactions.  The agenda estimates pre-rule activity in March 2021.
  • Home Mortgage Disclosure Act (Regulation C).  The HMDA amendments adopted by the CFPB in October 2015 revised certain pre-existing data points, added data points set forth in Dodd-Frank, and included additional data points based on discretionary authority in Dodd-Frank permitting the CFPB to mandate reporting of other information.  The October 2015 amendments also expanded the scope of reportable loans by requiring the reporting of dwelling-secured business or commercial purpose loans that meet the definition of a home purchase, refinancing, or home improvement transaction.  In May 2019, the Bureau issued an Advance Notice of Proposed Rulemaking seeking comment on whether to make changes to the revised or new data points, and the coverage of business or commercial-purpose loans that are made to a non-natural person and secured by a multi-family dwelling.  The agenda estimates issuance of a Notice of Proposed Rulemaking in February 2021.
  • Public Release of Home Mortgage Disclosure Act Data.  In December 2018, the CFPB announced final policy guidance regarding the application-level HMDA data that will be made available to the public.  The agenda estimates issuance of a Notice of Proposed Rulemaking on the public disclosure of HMDA data in February 2021.
  • Amendments to FIRREA Concerning Appraisals (Automated Valuation Models).  The Bureau is participating in interagency rulemaking with the Federal Reserve, OCC, FDIC, NCUA and FHFA to develop regulations to implement the amendments made by the Dodd-Frank Act to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) concerning appraisals.  The FIRREA amendments require implementing regulations for quality control standards for automated valuation models.  The agenda estimates that the agencies will issue a Notice of Proposed Rulemaking in June 2021.
  • Mortgage Servicing Rules.  The Bureau expects to propose additional amendments to the servicing rules, including, for example, loss mitigation provisions and estimates its proposal will be issued in March 2021.
  • Higher-Priced Mortgage Loan Escrow Exemption.  The Economic Growth, Regulatory Relief, and Consumer Protection Act directs the CFPB to implement an exemption from the mandatory escrow account requirement for higher-priced mortgage loans under the Truth in Lending Act and Regulation Z for certain insured credit unions and insured depository institutions.  The CFPB has proposed amendments to Regulation Z pursuant to this directive.  The Bureau estimates that it will issue a final rule in January 2021.

The Bureau’s long-term regulatory agenda items, which have no estimated dates for further action, include the following:

  • Abusive Acts and Practices.  In January 2020, the CFPB issued a policy statement to clarify the Dodd-Frank Act’s abusiveness standard.   The Bureau states that it recognizes the importance of continuing to monitor the use of AI nd machine learning and is evaluating “whether rulemaking, a policy statement, or other Bureau action.   The agenda indicates that in issuing the policy statement, “the Bureau did not foreclose the possibility of engaging in a future rulemaking to further define the abusiveness standard.”
  • Artificial Intelligence.  In February 2017, the CFPB issued a request for information concerning the use of alternative data and modeling techniques in the credit process.  The Bureau states that it recognizes the importance of continuing to monitor the use of AI and machine learning and is evaluating “whether rulemaking, a policy statement, or other Bureau action may become appropriate.”
  • Payday Disclosure Rule.  The Bureau states that it has begun research focused on providing information to consumers about the costs associated with payday loans.  The Bureau anticipates completing the first phase of this research, which involves qualitative testing, by the end of September 2021.  The results of the testing will inform the Bureau in deciding whether to move forward with quantitative testing that might support a future rulemaking or other actions related to payday loan disclosures.
  • Loan Originator Compensation.  The Bureau states that it has received feedback that aspects of its current rule “may be unnecessarily restrictive” and is considering a rulemaking to address these concerns.  Possible topics for consideration might include whether creditors can lower compensation for originating state housing finance authority loans and whether creditors can reduce compensation due to an originator’s error.

Other long-term items include the application of E-Sign Act requirements in the context of certain Bureau regulations and possible changes to the Bureau’s TILA/RESPA Integrated Disclosure Rule.

The U.S. Supreme Court ruling in Seila Law that the Dodd-Frank Act provision allowing the President to remove the Bureau’s Director only “for cause” is unconstitutional and the appropriate remedy is to sever that provision means that President-elect Biden will be able to remove Director Kraninger without cause.  As a result, the Bureau’s Spring 2021 rulemaking agenda could reflect a significant change in priorities.

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