Along with other federal agencies, 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.
- Qualified Mortgages. As we have previously described, the CFPB must in short order address 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”). The Patch is set to expire on January 10, 2021, leaving little time to complete notice-and-comment rulemaking, particularly on such a complex and arguably controversial issue. The CFPB has indicated that it will not extend the Patch, but will seek an orderly transition (as opposed to a hard stop). The CFPB asked for initial public input over the summer, and announced that it intends to issue some type of statement or proposal in December 2019.
- Home Mortgage Disclosure Act. The CFPB intends to pursue several rulemakings to address which institutions must report home mortgage data, what data they must report, and what data the agency will make public. First, the CFPB announced previously that it was reconsidering various aspects of the 2015 major fortification/revamping of HMDA reporting (some – but not all – of which was mandated by the Dodd Frank Act). The CFPB announced its intention to address in one final rule (targeted for next month) its proposed two-year extension of the temporary threshold for collecting and reporting data on open-end lines of credit, and the partial exemption provisions for certain depository institutions that Congress recently enacted. The CFPB intends to issue a separate rule in March 2020 to address the proposed changes to the permanent thresholds for collecting and reporting data on open-end lines of credit and closed-end mortgage loans.
Subsequently, the CFPB intends to solicit public comment on the manner in which HMDA data is modified for public disclosure, in order to protect consumer privacy. The CFPB issued guidance on that modification in 2018. However, stakeholders urged the CFPB to conduct a more formal notice-and-comment rulemaking process to address that data modification/public disclosure determination. The CFPB plans to issue a proposed rule for this purpose in July 2020. At that time, the CFPB also intends to open a rulemaking to address HMDA data points more broadly.
- Payday, Vehicle Title, and Certain High-Cost Installment Loans. The CFPB’s agenda also includes finalizing its payday lending rule. As we described here, that rulemaking began under prior CFPB Director Cordray, and initially included (among other provisions) an ability-to-repay requirement and a requirement to furnish information on applicable loans to a registered information system. Before Director Cordray’s rulemaking became effective, however, subsequent Acting Director Mulvaney proposed to eliminate those requirements. The CFPB announced that it intends to issue a final rule on this topic in April 2020.
- Debt Collection Practices. The CFPB also intends to finalize its proposal addressing various aspects of compliance with the Fair Debt Collection Practices Act. Among other topics, that proposal addressed “limited content” debt collection messages that could be left on voice mail, and clarified procedures for text and email communications. The proposed rule also would generally prohibit a collector from making more than seven telephone calls to a debtor within seven consecutive days, and it provided a model debt validation form. The regulatory agenda indicates that the CFPB also is engaged in testing consumer disclosures related to time-barred debt disclosures, which it did not address in the proposed rule. After testing, the CFPB apparently will assess whether to publish a supplemental proposed rule on that topic. The agenda indicates that the CFPB’s next action on these topics will occur in January 2020. Read more about the CFPB’s debt collection practices proposal here and here.
- PACE Financing. In response to Congressional mandate, the CFPB solicited comments on ability-to-repay regulations for Property Assessed Clean Energy (PACE) financing. PACE programs allow homeowners to finance energy-efficient home improvements (such as solar panels, water conservation projects, insulation, and new doors or windows) through special property tax assessments, secured by a priority property tax lien. Mayer Brown discussed the PACE proposed rule here. The agenda indicates that the CFPB will take its “next steps” related to PACE rulemaking in December 2019.
- Business Lending Data. The Equal Credit Opportunity Act now requires financial institutions to collect and report information on credit applications by women- and minority-owned and small businesses. The CFPB issued a Request for Information in 2017 and hosted a public symposium earlier this month to learn about the types of credit products offered and data collected by lenders. The CFPB anticipates that its next step will be to convene a panel under the Small Business Regulatory Enforcement Fairness Act, in conjunction with representatives of small businesses that may be affected by the rulemaking, although the agency does not provide a target date for that panel.
- Remittances. The Dodd-Frank Act permits insured depository institutions and credit unions to estimate certain required disclosures in connection with remittance payments under certain circumstances, but that exception will expire on July 21, 2020. The CFPB requested information in April 2019 on that expiration and the scope of the agency’s remittance rule. While the CFPB’s regulatory agenda indicates its plan to issue a proposed rule in December 2019, it also states that it is considering potential next steps other than rulemaking.