On May 18, 2016, the Consumer Financial Protection Bureau (CFPB) posted its semi-annual update regarding the Bureau’s rulemaking agenda. The Spring 2016 agenda contains an overview and timetable for the CFPB’s current initiatives.
The Bureau issued a Notice of Proposed Rulemaking on May 5, 2016 covering the use of arbitration agreements containing class action waivers in consumer financial services contracts. The proposed rule would prohibit covered providers of certain consumer financial products and services from using class action waivers to prevent consumers from filing or participating in a class action litigation to resolve disputes. The Notice of Proposed Rulemaking is the latest a series of steps the Bureau has taken in preparation for the rulemaking. In March 2015, the Bureau issued a study on arbitration to Congress. In fall 2015, the Bureau released an outline of proposals and convened a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel. Comments on the proposal are due on or before Monday, August 22, 2016. A final rule is not expected until summer 2017.
Payday, Auto Title, and Similar Lending Products
Though the Spring 2016 Agenda does not mention the June 2, 2016 CFPB field hearing on small dollar lending, it is anticipated that the hearing will coincide with the Bureau’s issuance of a Notice of Proposed Rulemaking. This rulemaking follows the SBREFA panel that was convened in April 2015 as well as a series of studies that have focused on payday lending, auto title loans, and online lenders’ collection practices.
The CFPB estimates that it will issue a final rule for prepaid financial products, which includes general purpose reloadable prepaid cards, in the summer of 2016. The CFPB issued a proposed rule in November 2014 to create specific provisions to regulate prepaid accounts in the Electronic Fund Transfer Act and its implementing Regulation E.
The Bureau expects to issue a final rule in the summer of 2016. The final rule will revise certain mortgage servicing rules contained in the Bureau’s December 2014 proposal. That proposal addressed enhanced loss mitigation requirements and compliance with certain rules concerning when the borrower is a potential or confirmed successor in interest or when the borrower is in bankruptcy. The Bureau also expects to issue a Notice of Proposed Rulemaking this summer that will clarify and provide additional guidance regarding the federal mortgage disclosures that consumers receive in accordance with the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).
The CFPB issued a white paper in June 2013 and a report in July 2014 on checking overdraft services. The Spring 2016 agenda states that the Bureau will continue to engage in pre-rule making activities and conduct additional research in preparation for pre-rule activities.
The Bureau issued an Advanced Notice of Proposed Rulemaking in November 2013 seeking comment and data regarding debt collection practices. The Bureau states in the Spring 2016 agenda that it is in the process of analyzing responses and is engaged in qualitative testing to determine “what information would be useful for consumers to have about debt collection and how that information should be provided to them.” The Bureau must conduct other pre-rule activities, including convening a SBREFA panel, before issuing a proposed rule. The agenda does not provide an estimate of when such pre-rule activities will occur.
The Bureau announced that it expects that its next larger participant rulemaking will involve consumer installment loans and vehicle title loans. Such rulemaking would define larger participants in those markets and bring them under the CFPB’s nonbank supervisory authority. The Bureau estimates that pre-rule activities will take place in December 2016.
Small Business Data Collection
Section 1071 of the Dodd-Frank Act amends the Equal Credit Opportunity Act to require financial institutions to collect and report certain data in connection with credit applications submitted by women- or minority-owned businesses and small businesses. The Bureau states in the Spring 2016 agenda that it is in the early stages of conducting research in order to implement section 1071.
The Bureau announced that potential long-term initiatives include rulemakings that will address credit reporting and student loan servicing.
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