Customer Financial Services Review

Customer Financial Services Review

CFPB Announces its Fall 2019 Regulatory Agenda

The Consumer Financial Protection Bureau recently released its Fall 2019 regulatory agenda, announcing its intentions over the next several months to address the GSE QM Patch, HMDA, payday/small dollar loans, debt collection practices, PACE financing, business lending data, and remittances along with other federal agencies. On the longer-term, the CFPB suggested it might also deal with feedback from the Loan Originator Compensation Rule beneath the Truth in Lending Act.

  • Qualified Mortgages. The scheduled expiration of the temporary Qualified Mortgage status for loans eligible for purchase by Fannie Mae or Freddie Mac (often referred to as the “Patch”) as we have previously described, the CFPB must in short order address. The Patch is scheduled to expire on January 10, 2021, making short amount of time to accomplish notice-and-comment rulemaking, especially on this kind of complex and issue that is arguably controversial. The CFPB has suggested that it’ll maybe perhaps not expand the Patch, but will look for an orderly transition (instead of a difficult end). The CFPB asked for initial input that is public summer time, and announced so it intends to issue some form of declaration or proposition in December 2019.
  • Home Loan Disclosure Act. The CFPB promises to pursue rulemakings that are several deal with which organizations must report home loan information, what information they need to report, and exactly exactly what information the agency can make general general general public. First, the CFPB announced previously it was reconsidering different facets of the 2015 fortification/revamping that is major of reporting (some – yet not all – of which had been mandated by the Dodd Frank Act). The CFPB announced its intention to deal with in a single last guideline (targeted for the following month) its proposed two-year expansion associated with short-term limit for gathering and reporting information on open-end credit lines, together with partial exemption conditions for many depository institutions that Congress recently enacted. The CFPB promises to issue a rule that is separate March 2020 to handle the proposed modifications towards the permanent thresholds for gathering and reporting information on open-end personal lines of credit and closed-end home mortgages.

CFPB Announces Proposal to Revoke (the majority of) the Payday/Small Dollar Lending Rule

On February 6, 2019, the CFPB issued a proposition to reconsider the mandatory underwriting conditions of its pending 2017 guideline regulating payday, car h2, and particular high-cost installment loans (the Payday/Small Dollar Lending Rule, or even the Rule).

The CFPB finalized and proposed its 2017 Payday/Small Dollar Lending Rule under previous Director Richard Cordray. Conformity with that Rule ended up being set in order to become mandatory in 2019 august. But, in October 2018, the CFPB (under its brand brand new leadership of previous Acting Director Mick Mulvaney) announced so it planned to revisit the Rule’s underwriting provisions (referred to as ability-to-repay provisions), plus it likely to issue proposed guidelines handling those conditions in January 2019. The Rule additionally became susceptible to a appropriate challenge, as well as in November 2018 a federal court issued an order remaining that August 2019 conformity date further order that is pending.

The 2017 Rule had identified two methods as unjust and abusive: (1) creating a covered loan that is short-term longer-term balloon re payment loan without determining that the customer has the capacity to repay the mortgage; and (2) missing express consumer authorization, making tries to withdraw payments from a consumer’s account after two consecutive re re re payments have actually unsuccessful. Under that 2017 Rule, creditors could have been required to underwrite payday, car h2, and specific high-cost installment loans (for example., determine borrowers’ capacity to repay). The Rule additionally will have needed creditors to furnish information about covered short-term loans and covered balloon that is longer-term to “registered information systems. ” See our past protection associated with the Rule right here and right right right here. … Continue studying CFPB Announces Proposal to Revoke (nearly all of) the Payday/Small Dollar Lending Rule

BCFP’s Fall 2018 Regulatory Agenda

On October 17, the Bureau of customer Financial Protection (“BCFP” or “Bureau”) given its Fall 2018 agenda that is regulatory. Notable features include:

  • Payday Lending Rule Amendments. In January 2018, the Bureau announced so it would participate in rulemaking to reconsider its Payday Lending Rule circulated in October 2017. Based on the Bureau’s Fall 2018 agenda, the Bureau expects to issue a notice of proposed rulemaking by January 2019 that may deal with both the merits therefore the conformity date (presently August 2019) associated with guideline.
  • Commercial Collection Agency Rule Coming. The Bureau expects to issue a notice of proposed rulemaking addressing financial obligation collection-related interaction methods and customer disclosures by March 2019. The Bureau explained that commercial collection agency continues to be a source that is top of complaints it gets and both industry and customer teams have actually motivated the Bureau to modernize Fair Debt Collection methods Act (“FDCPA”) demands through rulemaking. The Bureau would not specify whether its proposed rulemaking is restricted to third-party enthusiasts subject to the FDCPA, but its mention of FDCPA-requirements shows that will probably be the situation.
  • Small Company Lending Information Collection Rule Delayed. The Dodd-Frank Act amended the Equal Credit chance Act (“ECOA”) to need finance institutions to submit information that is certain to credit applications produced by women-owned, minority-owned, and smaller businesses into the Bureau and provided the Bureau the authority to need finance institutions to submit extra information. In May 2017, the Bureau issued A request Information comment that is seeking business financing data collection. The Bureau has now delayed its work on the rule and reclassified it as a long-term action while the BCFP’s Spring 2018 agenda listed this item as in the pre-rule stage. The Bureau noted it “intends to keep market that is certain and research tasks to facilitate resumption for the rulemaking. ”
  • HMDA Information Disclosure Rule. The Bureau expects to issue guidance later on this present year to govern disclosure that is public of Mortgage Disclosure Act (“HMDA”) information for 2018. The Bureau additionally announced it has made a decision to participate in notice-and-comment rulemaking to govern disclosure that is public of information in future years.
  • Assessment of Prior Rules – Remittances, Mortgage Servicing, QM; TRID up next. The Dodd-Frank Act calls for the Bureau to conduct an evaluation of each and every rule that is significant by the Bureau under Federal customer economic legislation within 5 years following the effective date regarding the guideline. The Bureau announced that it expects to complete its assessments of the Remittance Rule, the 2013 RESPA Mortgage Servicing Rule, and the Ability-to-Repay/Qualified Mortgage Rule by January 2019 in accordance with this requirement. At that right time, it’s going to start its assessment for the TILA-RESPA Integrated Disclosure Rule (TRID).
  • Abusiveness Rule? In line with current statements by Acting Director Mick Mulvaney that while unfairness and deception are well-established into the legislation, abusiveness just isn’t, the Bureau claimed it is considering whether or not to make clear this is of abusiveness through rulemaking. The Bureau under former Director Richard Cordray rejected determining abusiveness through rulemaking (although the payday guideline relied, in component, from the Bureau’s abusiveness authority), preferring alternatively to create abusiveness claims in enforcement procedures to ascertain the contours associated with the prohibition. Time will tell in the event that Bureau will observe through with this.

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