Here are 5 things the CFPB will focus on in 2019

Publishes spring 2019 rulemaking agenda

The Consumer Financial Protection Bureau recently published its spring 2019 rulemaking agenda, showing the regulatory matters it reasonably anticipates having under consideration during the period of May 1, 2019 to April 30, 2020.

The CFPB explained that the new permanent Director Kathy Kraninger is now ready to begin rulemaking activities after having recently completed a listening tour.

“A permanent director of the Bureau took office in December 2018,” the CFPB said in a statement. “The director recently completed a listening tour to engage with bureau stakeholders, employees and outside experts, building on feedback submitted through more than 88,000 public comments in response to the Bureau’s 2018 Call for Evidence initiative.”

“The bureau expects to communicate further information about future planning and priorities in the coming months,” the bureau continued. “In the meantime, this Spring 2019 Agenda reflects ongoing rulemaking activities, including initiatives to implement statutory requirements and to address the potential sunset of statutory and regulatory provisions.”

The agenda includes finishing propositions from its fall 2018 agenda as well as proposing new ones and future requests for information. There are several different rules in various stages the bureau says it will be focusing on in the coming year, but according to law firm Buckley, there are five that stand above the rest.

Here are five key rulemaking initiatives the bureau will focus on:

1. Property Assessed Clean Energy Financing: This program allows homeowners to obtain financing to make improvements to their homes to increase the home’s energy efficiency. The new proposal is currently in the pre-rule stage. Back on March 4, 2019, the CFPB published an advanced notice of the proposed rulemaking and requested comments from the industry. The new rule could see an Ability-to-Repay provision added to PACE regulations, much like currently exists in mortgage lending and requires lenders to make a “reasonable and good faith determination” on whether a borrower can repay a loan before approving them for said loan. PACE programs are typically not regulated as heavily as other financial services, including mortgage lending, however now, the CFPB is looking at increasing its oversight of the PACE industry.

The CFPB announcement states that it is looking for information in five categories: (1) written materials associated with PACE financing transactions; (2) descriptions of current standards and practices in the PACE financing origination process; (3) information relating to civil liability under TILA (Truth in Lending Act) for violations of the ATR requirements in connection with PACE financing, as well as rescission and borrower delinquency and default; (4) information about what features of PACE financing make it unique and how the Bureau should address those unique features; and (5) views concerning the potential implications of regulating PACE financing under TILA.

2. Remittance Transfers: The Remittance Rule imposes requirements on companies that send international money transfers, or remittance transfers, on behalf of consumers. Among its requirements, the Rule mandates that providers generally must disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient. On April 25, 2019, the bureau issued a request for information to consider if the rule had been effective in achieving its goals. The bureau requested information on two aspects of the Remittance Rule. First, the bureau asked for information to determine whether to propose changing the remittance transfer providers the rule covers. Specifically, the bureau is seeking information about the number of remittance transfers a provider must make to provide them in the normal course of business, and information on incorporating a small financial institution exception into the rule.

Second, the bureau asked for information about the expiration of a temporary exception in the rule that allows certain insured institutions to estimate the exchange rate and certain fees they are required to disclose when sending remittance transfers. The statutory provision authorizing the temporary exception expressly limits its length and does not provide the bureau the authority to extend the exception beyond July 21, 2020.

3. Home Mortgage Disclosure Act/Regulation C: The bureau proposed on May 2, 2019, new HMDA rules that would relax regulations for some smaller entities. This new rule is also in the pre-rule stage. Last year, the CFPB relaxed some of the requirements for the data collection and reporting stipulated by HMDA. The policy exempted insured depository institutions and credit unions that originated less than 500 closed-end mortgages or 500 open-end lines of credit in each of the two preceding years from certain HMDA reporting requirements. Now, the CFPB is proposing to ease the HMDA reporting requirements even more.

The CFPB announced that it is proposing new HMDA rules that would increase the HMDA reporting threshold for mortgages, meaning some smaller lenders and credit unions may not have to report their lending activities at all. Under the current rules, lenders that originate 25 mortgages or more in a two-year period are required to report to their HMDA data to the CFPB. The new proposal establishes two new reporting thresholds that are under consideration. According to the CFPB, the new rules would raise the HMDA reporting requirement to either 50 or 100 mortgages during a two-year period.

According to the CFPB, the new rules for mortgages would go into effect on Jan. 1, 2020.

4. Debt Collection Rule: This rule has advanced to the proposed rule stage, and would implement the Fair Debt Collection Practices Act. On May 7, 2019, the CFPB issued a notice of proposed rulemaking that would 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 newer 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 bureau is taking the next step in the rulemaking process to ensure we have clear rules of the road where consumers know their rights and debt collectors know their limitations,” Kraninger said at the time. “As the CFPB moves to modernize the legal regime for debt collection, we are keenly interested in hearing all views so that we can develop a final rule that takes into account the feedback received.”

5. Payday Rule/Delay of Compliance Date: On February 6, 2019, the CFPB proposed to rescind certain provisions of its 2017 final rule governing “Payday, Vehicle Title, and Certain High-Cost Installment Loans.” The bureau announced it is looking to rescind the rule’s requirements that lenders make certain underwriting determinations before issuing payday, single-payment vehicle title, and longer-term balloon payment loans. This is now in the final rule stage. The CFPB explained it found that by rescinding this requirement, it would allow consumers greater access to credit.

In October 2018, under the leadership of then Acting Director Mick Mulvaney, the bureau announced that it would issue Notice of Proposed Rulemakings to reconsider the rule’s mandatory underwriting requirements and to address the rule’s compliance date.

Here is a complete list of all the bureau’s rule list for spring 2019:

  • Pre-rule stage: Business Lending Data (Regulation B)
  • Pre-rule stage: Higher-Priced Mortgage Loan Escrow Exemption
  • Pre-rule stage: Property Assessed Clean Energy Financing
  • Pre-rule stage: Remittance Transfers
  • Pre-rule stage: Home Mortgage Disclosure Act (Regulation C)
  • Proposed rule stage: Debt Collection Rule
  • Proposed rule stage: Home Mortgage Disclosure Act (Regulation C)
  • Proposed rule stage: Payday, Vehicle Title, and Certain High-Cost Installment Loans
  • Proposed rule stage: Public Release of Home Mortgage Disclosure Act Data
  • Final rule stage: The Expedited Funds Availability Act (Regulation CC)
  • Final rule stage: Payday, Vehicle Title, and Certain High-Cost Installment Loans; Delay of Compliance Date

To read more about each proposed rule, click here.

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