VIDEO: Upcoming CFPB Rules August 2021
In this Compliance Clip (video), Adam discusses the CFPB’s recently announced rulemaking agenda. This information is great for understanding what new rules may/will be coming in the near and distant future.
Video Transcript
The following is a transcript of this video.
This Compliance Clip is going to talk about the upcoming CFPB Rules. We just finished recording our Summer 2021 Quarterly Compliance Update and these next couple of slides are taken right from that program to kind of give you an idea of what's in that program and to share with you the upcoming CFPB rules.
On June 11, 2021, the CFPB announced that they had released their Spring 2021 Agenda. Yes, that's in the summertime, but it's actually sooner than they had been doing a couple of years ago. What happens is that twice a year, the CFPB releases their rulemaking agenda as part of the larger Unified Agenda. This agenda outlines things that the CFPB is thinking about in the rulemaking process and there's a couple of different categories as we'll see as we go through here.
In their agenda, the CFPB lists a number of rules in different stages, including, number one, Long-term Actions. The Long-term Actions list includes Artificial Intelligence and Mortgage Servicing under Regulation X. Then they have a category of Prerule. The Prerule Stage, the items that are included there are Consumer Access to Financial Records, Property Assessed Clean Energy Financing as well. Then there's a Proposed Rule Stage where some of these we've already seen and some of these are in process. We've seen the Business Lending Data in the works. We saw it in the Prerule Stage but they're getting that to the proposal stage. At this point, this would be Business Lending Data Collection and Reporting. So you'll have small business data collection requirements that are similar to HMDA under regulation B, but are different and are really a requirement of the Dodd-Frank Act. That's in the proposal stage. Also in the proposal stage are Amendments to FIRREA Concerning Appraisals specific to Automated Valuation Models. Then finally, we've got Mortgage Servicing COVID-19 Relief that we saw released at the end of June of 2021. In the Final Rule Stage, they mentioned the Debt Collection Rule that we're aware of and Amendments to Regulation Z to Facilitate the Transition from the LIBOR, which is going away, which of course we know about, but these are the technical requirements to update Regulation Z.
Then they also provided us with a Completed Action List of rules, which we should all be familiar with at this point. These are things that have come and gone but the CFPB does update this twice a year to show what they have done.
One item that I like to note, and I noted it in our Summer 2021 Quarterly Compliance Update is this list that has several long-term actions that were on the Spring 2020 list, but have since been removed. These are things that were there previously, they were on the Fall agenda as well, but they've been removed. The Acting Director of the CFPB said that he's removed these because they were put on by the prior director and they're not sure if these are things that the new director will want to pursue in the future. So they're going to leave it up to the new director and they expect their full agenda or outline whether or not these items are going to be pursued. There were a couple of things that have been on and off over the years and things that were on, most recently last fall 2020 and spring of 2020, now going to be removed at this point. Since there is an interim CFPB director at this time, at the time of this recording in early August of 2021, then what's happened is they've said, they're going to wait for the new director to outline what is required. This includes a new rule, a rule they're thinking about, they're thinking whether or not they need to implement a rule for Abusive Acts and Practices. This is something that I think would be beneficial for the industry because abusive acts and practices is not well-defined. It’s not even close to being as defined as unfair or deceptive, which have been around for years, which are part of the larger UDAAP requirement. That's something that they've talked about over the last several years, has gone on and off the rulemaking agenda. Currently it is off, but we'll see if it comes back on next fall. Also, E-Sign Act requirements. I think the industry is long overdue for an update to e-sign. E-sign is a law, but the CFPB could potentially implement a regulation to give us more specific guidance because the law was written on technology based in the nineties. It was passed in the early 2000s. How that applies to technology of the 2020s is very interesting. CFPB guidance probably would be beneficial for the industry. Also, something that has been removed is Loan Originator Compensation. These are things the CFPB is thinking about in their long-term actions. They've taken it off at this point. We'll see if this comes back on down the road.