CFPB Rescinds Temporary Flexibilities and Supervisory Recommendations

Effective April 1, 2021, the CFPB is rescinding several past issuances that extended temporary, COVID-19 related flexibilities to financial institutions in the mortgage, credit reporting, and credit card and prepaid card industries.  As a result, among other things, the CFPB:

• Rescinded its “Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic”, which provided for certain COVID-19 related supervisory, enforcement, and examination flexibilities, and instead has announced that it will “exercise its supervisory and enforcement authority consistent with the Dodd-Frank Act and with the full authority afforded by Congress[.]”
• Withdrew from the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” (which, among other things, stated that the agencies would not criticize financial institutions for mitigating credit risk through prudent actions consistent with safe and sound practices) and the “Interagency Statement on Appraisals and Evaluations for Real Estate Related Financial Transactions Affected by Coronavirus” (which, among other things, provided flexibility for performing appraisals without interior inspections due to COVID-19).
• Rescinded its prior statement that it did not intend to cite in an examination or initiate an enforcement action for failure to report quarterly HMDA data. Financial institutions that are required to file first quarter data on or before May 31, 2021, must do so for all covered loans and applications with final action taken dates between January 1, 2021, and March 31, 2021.
• Stated that it will exercise its full supervisory and enforcement authority with respect to FCRA and Regulation V and is partially rescinding its “Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act”. It is preserving the section of that statement entitled “Furnishing Consumer Information Impacted by COVID-19”.
• Now expects land developers to begin filing annual activity reports and financial statements, as required by the Interstate Land Sales Full Disclosure Act and Regulation J.
• Rescinded its prior statement granting flexibility to lenders to resolve billing errors under Regulation Z.

Additionally, effective March 31, 2021, the CFPB has announced that it will no longer issue Supervisory Recommendations and instead will continue to rely on Matters Requiring Attention to convey supervisory expectations in examination reports and supervisory letters.