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. Throughout the longer-term, the CFPB suggested it may also deal with feedback from the Loan Originator Compensation Rule underneath 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 placed to expire on January 10, 2021, making very little time to accomplish notice-and-comment rulemaking, especially on this type of complex and issue that is arguably controversial. The CFPB has suggested it will maybe not expand the Patch, but will look for an orderly change (in the place of a tough end). The CFPB asked for initial general public input over the summertime, and announced so it promises to issue some form of declaration or proposition in December 2019.
  • Home Loan Disclosure Act. The CFPB promises to pursue a few rulemakings to deal with which institutions must report mortgage information, what information they must report, and just just what information the agency is likely to make general public. First, the CFPB announced formerly it was reconsidering different facets of the 2015 fortification/revamping that is major of reporting (some – however all – of which had been mandated because of the Dodd Frank Act). The CFPB announced its intention to deal with in a single rule that is finaltargeted for the following month) its proposed two-year expansion associated with the short-term limit for collecting and reporting information on open-end personal lines of credit, in addition to partial exemption conditions for many depository institutions that Congress recently enacted. The CFPB promises to issue a split guideline in March 2020 to deal with the proposed modifications into the permanent thresholds for gathering and reporting information on open-end credit lines and closed-end home loans.

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

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

The CFPB finalized and proposed its 2017 Payday/Small Dollar Lending Rule under previous Director Richard Cordray. Conformity with this Rule had been set to be mandatory in August 2019. But, in October 2018, the CFPB (under its new leadership of previous Acting Director Mick Mulvaney) announced it planned to revisit the Rule’s underwriting provisions (referred to as ability-to-repay conditions), also it anticipated to issue proposed guidelines handling those conditions in January 2019. The Rule additionally became susceptible to an 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 techniques as unfair and title loans oregon abusive: (1) building a covered loan that is short-term longer-term balloon payment loan without determining that the buyer has the capacity to repay the mortgage; and (2) missing express consumer authorization, making attempts to withdraw re payments from a consumer’s account after two consecutive re payments have actually unsuccessful. Under that 2017 Rule, creditors could have been expected to underwrite payday, vehicle h2, and specific high-cost installment loans (for example., determine borrowers’ capacity to repay). The Rule additionally could have needed creditors to furnish information about covered short-term loans and covered longer-term balloon loans to “registered information systems. ” See our coverage that is previous of Rule right right here and right right here. … Continue Reading 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”) granted its Fall 2018 agenda that is regulatory. Notable shows consist of:

  • Payday Lending Rule Amendments. In January 2018, the Bureau announced so it would take part 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 which will deal with both the merits therefore the conformity date (currently August 2019) of this guideline.
  • Commercial Collection Agency Rule Coming. The Bureau expects to issue a notice of proposed rulemaking handling financial obligation collection-related interaction techniques and customer disclosures by March 2019. The Bureau explained that business collection agencies stays a top way to obtain the complaints it gets and both industry and customer teams have actually motivated the Bureau to modernize Fair Debt Collection methods Act (“FDCPA”) needs through rulemaking. The Bureau failed to 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 specific information relating to credit applications created 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 obtain 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 so it “intends to keep particular market monitoring 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 so 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 every rule that is significant by the Bureau under Federal customer economic legislation within five years following the effective date regarding the rule. 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 evaluation for the TILA-RESPA Integrated Disclosure Rule (TRID).
  • Abusiveness Rule? In keeping 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 that it’s considering whether or not to make clear this is of abusiveness through rulemaking. The Bureau under previous Director Richard Cordray rejected abusiveness that is defining rulemaking (although the payday guideline relied, in component, in the Bureau’s abusiveness authority), preferring rather to create abusiveness claims in enforcement procedures to ascertain the contours associated with prohibition. Time will tell in the event that Bureau will observe through with this.