WBK Industry - Federal Regulatory Developments

CFPB Issues Its Fall 2016 Rulemaking Agenda

05 Jan 2017

As part of its participation in the OMB’s Unified Agenda of Federal Regulatory and Deregulatory Actions, the CFPB recently issued its Fall 2016 regulatory agenda. The agenda identifies the CFPB’s regulatory priorities for the period from November 1, 2016 to October 31, 2017, and it includes continuing rulemaking activities (addressing critical issues in various markets for consumer financial products and services) as well as a long-term agenda of potential future rulemaking areas of interest. The next agenda will be published in Spring 2017 and will update this agenda through Spring 2018.

Below is a summary list of certain initiatives that the CFPB intends to pursue:

Implementation and Supervisory Initiatives
- Know Before You Owe Mortgage Disclosure Rule/TRID
  - In Summer 2016, the CFPB released a Notice of Proposed Rulemaking, which proposed substantive changes to the rule on various issues as well as clarifications and technical amendments. The comment period ended on October 18, 2016.
  - The CFPB is in the process of reviewing comments and anticipates finalizing the proposal in March 2017.
- Home Mortgage Disclosure Act (“HMDA”)
  - In October 2015, the CFPB issued a final rule implementing Dodd-Frank amendments to HMDA, which expanded existing data reporting requirements in connection with housing-related loans.
  - Certain elements take effect in January 2017, and most new data collection requirements begin in January 2018.
  - The CFPB indicated that it is working to streamline and modernize the HMDA data reporting processes in conjunction with implementation of the regulatory changes, and is conducting industry outreach to help with preparation for regulatory and operational changes. The CFPB expects a follow-up rulemaking to occur in 2017, in which it will make technical corrections and clarify certain requirements under the new provisions of Regulation C.
- Servicing Rules
  - The CFPB reiterated that, in August 2016, it issued a final rule revising various provisions of the mortgage servicing rules in Regulation X and Regulation Z. Most of the final rule will be effective in 2017, while certain provisions will be effective in 2018.
- Mortgage Appraisals
  - The CFPB indicated that it continues to participate in a series of interagency rulemakings to implement various Dodd-Frank Act amendments to TILA and FIRREA relating to mortgage appraisals, reminding industry participants of the April 2015 final rule regarding appraisal management company (“AMC”) minimum requirements and indicating that these joint agency efforts are continuing with efforts to amend FIRREA concerning required quality control standards relating to the use of automated valuation models.
- Larger Participants and Non-Depository Lender Registration
  - The CFPB continues rulemaking activities that will further establish its nonbank supervisory authority by defining larger participants of certain markets for consumer financial products and services.
  - The CFPB is considering whether rules to require registration of larger participants or other non-depository lenders would facilitate supervision.
- Privacy (Regulation P)
  - In July 2016, the CFPB released a proposed amendment to Regulation P (which implements the Gramm-Leach-Bliley Act (“GLBA”)) that provides financial institutions meeting certain conditions an exception to the requirement to provide an annual privacy notice. The rulemaking will implement changes made by the Fixing America’s Surface Transportation Act (“FAST Act”) that was signed into law in December, 2015.
  - The CFPB expected to issue a final rule in Fall 2016, so we anticipate a final rulemaking in the near future.
Developing Initiatives
- Arbitration Clauses in Consumer Agreements
  - In May 2016, the CFPB issued a proposed rule prohibiting financial service companies from using mandatory arbitration clauses as a way to block class action lawsuits in new contracts. The comment period ended on August 22, 2016.
  - The CFPB received thousands of comments on the proposed rule and is considering developing a final rule for Spring 2017.
- Debt Collection
  - In July 2016, the CFPB released materials in advance of convening a panel under the Small Business Regulatory Enforcement Fairness Act (“SBREFA”). While this SBREFA process focuses on companies that are considered “debt collectors” under the FDCPA, the CFPB expects to convene in 2017 a separate SBREFA proceeding to focus on companies that collect their own debts.
- Equal Credit Opportunity Act (“ECOA”)
  - Section 1071 of the Dodd-Frank Act amends ECOA to require financial institutions to report information regarding credit applications made by women-owned, minority-owned, and small businesses. The CFPB is in the early stages of working to implement this section, starting with developing its understanding of the players, products, and practices in the small business lending market and of the potential ways for implementation. Later, it expects to begin developing proposed regulations regarding data to be collected and determining appropriate procedures and privacy protections necessary for related information gathering and public disclosure.
Long-Term Initiatives
- The CFPB may explore potential rulemakings in the areas of consumer reporting and student loan servicing.
- The CFPB will engage in a lookback process in which it will assess the effectiveness of already adopted rules.