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CFPB Publishes Fall 2019 Regulatory Agenda

michaelchristians • January 4, 2020

On December 26th, the Consumer Financial Protection Bureau (CFPB) published its fall 2019 regulatory agenda. It covers the CFPB’s anticipated rulemaking activities for the period between October 1, 2019 and September 30, 2020. Here are the highlights:

Data Collection for Women-Owned, Minority-Owned and Small Businesses
Section 1071 of the Dodd-Frank Act requires the CFPB to prescribe rules for the collection of information in connection with applications for credit submitted by women-owned, minority-owned and small businesses. Expect rulemaking to commence in the new year to address the following statutory requirements:
• Creditors will be required to collect certain information such as the purpose of the loan, the census tract in which the entity’s principal place of business is located and the gross annual revenue of the business during its last fiscal year
• This information must be submitted to the CFPB annually and retained by the creditor for a period of 3 years

Home Mortgage Disclosure Act
The CFPB anticipates issuing a final rule in the spring of 2020 to increase the transactional coverage threshold for closed-end mortgage loans to either 50 or 100 loans in each of the two preceding calendar years. Remember that the CFPB has already temporarily extended the transactional coverage threshold for open-end mortgage loans (500) for an additional two years.

In addition, the CFPB is expected to take action in the summer of 2020 on its Advance Notice of Proposed Rulemaking (ANPR). The May 2019 ANPR sought commentary regarding whether to make changes to the data points currently required for collection under Regulation C.

Payday, Vehicle Title and Certain High-Cost Installment Loans
In February 2019, the CFPB issued a Notice of Proposed Rulemaking (NPRM) to rescind the mandatory underwriting provisions of its Payday, Vehicle Title and Certain High-Cost Installment Loans rule. The CFPB expects to take final action with regard to this NPRM in April 2020.

Regulation F
Regulation F implements the requirements of the Fair Debt Collection Practices Act. It makes it illegal for a debt collector to engage in unfair, deceptive or abusive acts or practices while attempting to collect a debt. In May 2019, the CFPB issued a proposed rule identifying several substantive changes to Regulation F. The CFPB anticipates taking final action with regard to Regulation F in 2020.

Note: most financial institutions will not be affected by these changes as Regulation F only applies to those who regularly collect or attempt to collect a debt owed to another.

Remittance Transfers
Subpart B of Regulation E contains the requirements for remittance transfers, defined as the electronic transfer of funds from a consumer in the United States to a receiver in a foreign country. Currently, the requirements do not apply to financial institutions that provide 100 or fewer remittance transfers in a calendar year. In April 2019 the CFPB issued a request for information, that among other things, sought commentary as to whether or not to raise this threshold. The regulatory agenda states that the CFPB will continue its work related to any potential remittance transfer rulemaking into the new year.

Qualified Mortgage GSE Patch
Under certain conditions, a financial institution may originate a loan as a qualified mortgage (QM) even if the borrower’s debt-to-income (DTI) ratio exceeds 43%. Under the GSE patch, if a loan with a DTI ratio over 43% is eligible for sale to the secondary market at the time of consummation, the loan may be considered a QM even if retained in the creditor’s portfolio. The catch is that the GSE patch is only temporary. It is set to expire on January 1, 2021.

In July 2019, the CFPB issued an ANPR indicating that it plans to allow the GSE patch to expire as originally scheduled. However, the ANPR also sought commentary on the following questions:
• Should the QM requirements continue to demand a maximum DTI ratio, and if so, should that remain at the current 43%; and
• Should the QM underwriting standards found in Appendix Q to Regulation Z be retained as is, amended, or eliminated altogether?
As a result, it is possible that the CFPB will engage in further rulemaking in 2020 regarding the QM requirements of Regulation Z.

Loan Originator Compensation
Based on feedback that certain provisions of its loan originator compensation requirements are unnecessarily restrictive, the CFPB is considering further rulemaking to address the following:
• Permitting adjustments to a loan originator’s compensation to facilitate the origination of state housing finance authority loans; and
• Permitting adjustments to a loan originator’s compensation due to errors made during the origination process

E-Sign Act
The CFPB is considering a rulemaking to address a range of issues related to the Electronic Signatures in Global and National Commerce (E-Sign) Act and credit cards. Any potential rulemaking would make it easier for consumers to apply for and receive information about credit cards via electronic channels.

Regulatory Flexibility Act
The Regulatory Flexibility Act requires the CFPB to consider how its rulemakings have impacted small businesses. According to the fall 2019 regulatory agenda, the CFPB plans to review the following in the new year:
• Regulation E’s rules concerning overdrafts; and
• The Credit Card Accountability, Responsibility and Disclosure (CARD) Act.

As you can see, another busy year awaits from a regulatory compliance perspective. Should your financial institution or organization need help navigating this complex regulatory environment in the new year, please contact Michael Christians Consulting, LLC at michael@mchristiansconsulting.com. We’d love to be your compliance partner!

The post CFPB Publishes Fall 2019 Regulatory Agenda appeared first on Michael Christians Consulting, LLC.

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