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. Within the longer-term, the CFPB suggested it might also deal with feedback regarding the Loan Originator Compensation Rule beneath the Truth in Lending Act.

  • Qualified Mortgages. Even as we have formerly described, the CFPB must simply speaking order address the planned termination associated with temporary Qualified home loan status for loans qualified to receive purchase by Fannie Mae or Freddie Mac (also known as the “Patch”). The Patch is defined to expire on January 10, 2021, making very little time to complete notice-and-comment rulemaking, especially on this type of complex and perhaps controversial problem. The CFPB has suggested so it will maybe perhaps not expand the Patch, but will look for an orderly change (in place of a tough stop). The CFPB asked for initial general public input over the summertime, and announced so it promises to issue some sort 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 is likely to make general general public. First, the CFPB announced formerly it was reconsidering different components of the 2015 major fortification/revamping of HMDA reporting (some – not all – of which had been mandated by the Dodd Frank Act). The CFPB announced its intention to deal with in a single rule that is finaltargeted for next 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 several depository institutions that Congress recently enacted. The CFPB promises to issue a rule that is separate March 2020 to deal with the proposed changes to your permanent thresholds for gathering and reporting information on open-end credit lines and closed-end home mortgages.

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

On February 6, 2019, the CFPB issued a proposition 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 even the Rule).

The CFPB proposed and finalized its 2017 Payday/Small Dollar Lending Rule under previous Director Richard Cordray. Conformity with this Rule had been set in order to become mandatory in August 2019. But, in October 2018, the CFPB (under its brand brand new leadership of previous Acting Director Mick Mulvaney) announced it expected to issue proposed rules addressing those provisions in January 2019 that it planned to revisit the Rule’s underwriting provisions (known as the ability-to-repay provisions), and. The Rule also became at the mercy of an appropriate challenge, plus in November 2018 a federal court issued an order remaining that August easy title loans in ohio 2019 conformity date further order that is pending.

The 2017 Rule had identified two methods as unjust and abusive: (1) building a covered loan that is short-term longer-term balloon re re payment loan without determining that the customer is able to repay the mortgage; and (2) missing express consumer authorization, making tries to withdraw re re payments from the consumer’s account after two consecutive re payments have actually unsuccessful. Under that 2017 Rule, creditors could have been necessary to underwrite payday, vehicle h2, and particular 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 of this Rule right right here and right here. … Continue studying CFPB Announces Proposal to Revoke (the majority 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 regulatory agenda. Notable features consist of:

  • 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 address both the merits while the compliance date (presently August 2019) associated with guideline.
  • Commercial Collection Agency Rule Coming. The Bureau expects to issue a notice of proposed rulemaking handling financial obligation collection-related interaction techniques and consumer disclosures by March 2019. The Bureau explained that commercial collection agency stays a source that is top of complaints it gets and both industry and customer groups have actually motivated the Bureau to modernize Fair Debt Collection techniques Act (“FDCPA”) demands through rulemaking. The Bureau failed to specify whether its proposed rulemaking would be restricted to third-party enthusiasts subject to the FDCPA, but its mention of FDCPA-requirements shows that may very well be the outcome.
  • Small Company Lending Information Collection Rule Delayed. The Dodd-Frank Act amended the Equal Credit chance Act (“ECOA”) to need banking institutions to submit specific information relating to credit applications produced by women-owned, minority-owned, and small enterprises to your Bureau and offered the Bureau the authority to need finance institutions to submit extra information. In-may 2017, the Bureau issued an ask for Information seeking touch upon business financing data collection. Even though the BCFP’s Spring 2018 agenda detailed this product like in the pre-rule stage, the Bureau has delayed its work with the guideline and reclassified it being a long-lasting action. The Bureau noted so it “intends to keep market that is certain and research tasks to facilitate resumption of this rulemaking. ”
  • HMDA Information Disclosure Rule. The Bureau expects to issue guidance later in 2010 to govern public disclosure of Residence 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 public disclosure of HMDA information in the future years.
  • Assessment of Prior Rules – Remittances, Mortgage Servicing, QM; TRID up next. The Dodd-Frank Act calls for the Bureau to conduct an assessment of every significant guideline used by the Bureau under Federal customer economic legislation within 5 years following the effective date associated with the guideline. According to this requirement, the Bureau announced so it expects to accomplish its assessments associated with Remittance Rule, the 2013 RESPA Mortgage Servicing Rule, additionally the Ability-to-Repay/Qualified home loan Rule by January 2019. At that time, it will probably start its evaluation regarding 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 when you look at the statutory legislation, abusiveness just isn’t, the Bureau reported it is considering whether or not to explain this is of abusiveness through rulemaking. The Bureau under previous Director Richard Cordray rejected determining abusiveness through rulemaking (although the payday rule relied, in component, from the Bureau’s abusiveness authority), preferring alternatively to carry abusiveness claims in enforcement procedures to determine the contours for the prohibition. Time will tell in the event that Bureau will observe through with this.
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