Well, if you consider that the CFPB has been up to plate with three significant rulemakings aimed at traditional installment lenders, and have promulgated two of the three Regulations, you have to admit that the Bureau is hitting at a Hall of Fame rate.
The Bureau's Arbitration Agreements Rule—released July 10, 2017, will become effective in March of 2018, absent action by Congress to disapprove the Rule. The Rule allows mandatory arbitration on a non-class wide basis. However, it
- strikes out the imposition of mandatory, class-wide arbitration
- imposes specific language to include in pre-dispute arbitration agreements, and
- requires certain record keeping on lenders.
The U.S. House of Representatives acted immediately to disapprove the Regulation pursuant to the Congressional Review Act. To date, the U.S. Senate has balked. While the Senate has 60 legislative days to act from publication of the Regulation in the Federal Register (July 19th), 42 of those legislative days have passed as of October 18th. So, there is time for the Senate to act, but we are in the late innings. And, there is still the wild card element in that President Trump would have to sign the measure of disapproval.
Meanwhile, enough business related groups to field two baseball teams (seriously, 18 different groups) have joined together to pinch hit for the Senate. They have filed suit in U.S. District Court in Dallas asking the court to serve as umpire, and intervene and delay the effect of the Regulation while the plaintiffs challenge the Constitutionality of the Regulation. The Senate's chances at bat seem a better proposition than this litigation to beat the effective date of the Regulation.
The Bureau also stepped up to the plate earlier this month with the promulgation of its Payday, Vehicle Title and Certain High-Cost Installment Loans final rule. It addresses three types of consumer loans
- those of 45 days or less without respect to APR
- those requiring a balloon payment without respect to length of term, APR or collateral, and
- those exceeding 36% APR and utilizing a leveraged payment mechanism unless requested or initiated by the consumer.
While payday and title pledge lenders have already acted to challenge this Regulation in court, neither house of Congress seems anxious to get into this ballgame.
The third rulemaking that the Bureau is still pursuing is in the area of debt collection. It has been more than a year (July, 2016) since the CFPB first released its Proposals Under Consideration and Alternatives Considered for Debt Collector and Debt Buyer Rulemaking. That proposal
- addresses the substantiation of claims of indebtedness, the review and transfer of certain information between debt owner and debt collector, and another validation notice and statement of rights
- includes a litigation disclosure, and a substantive prohibition against collecting time-barred and obsolete debt, and
- regulates collector communication practices, including the general time, place and manner of communication.
We don't know for sure why the Bureau has not yet given the sign to swing-away on a debt collection regulation. We speculate that it is considering the impact of the U.S. Supreme Court's decision in Henson v. Santander Consumer USA, Inc. (holding that the FDCPA does not apply to debt buyers), before bringing the debt collection proposal up. Perhaps the Bureau wants to wait out Congress on the Arbitration Rule before bringing the debt collection proposal up to the plate as a Regulation.
Stay tuned. The Bureau may end up batting 1.000% before the 2017 season comes to an end.