Last October, the CFPB issued its Final Rule for Prepaid Accounts which established comprehensive consumer protections for prepaid accounts under Regulation E. Due to the timing of the rule, Congress had until Thursday to repeal the regulation by passing a disapproval resolution in both chambers with simple majorities under the Congressional Review Act (CRA). That deadline came and went without a repeal of the Bureau’s new rule.
According to Reuters, lawmakers could still vote after this week to repeal rules that Obama finished during the last six months of his term, but it will require super-majorities in each chamber, which is highly unlikely.
Despite being unable to gather enough votes to support the resolution, Georgia Republican Senator David Perdue has stated that he intends to keep pressure on the CFPB. In fact, Perdue said he would be willing to use the Congressional Review Act in the future if the CFPB were to promulgate other controversial rules.
The Republican’s failed attempt to block the regulation using the CRA may indicate that future CFPB regulations could survive similar efforts by GOP lawmakers.
It is widely believed that the next rulemaking on the Bureau’s to-do list is its arbitration rulemaking. The Bureau’s Fall 2016 Rulemaking Agenda indicated that the CFPB “is reviewing and considering comments on the proposed rule” as it “considers development of a final rule for early 2017.” In fact, there had been speculation that the CFPB could issue a final rule by Inauguration Day. To date, the CFPB has not issued its final arbitration rule. Observers believe that the delay is largely because the final rule will likely be challenged under the CRA. Perhaps recent developments may encourage the Bureau to change their strategy.
The Prepaid Account Final Rule, which contains provisions governing disclosures, error resolution, and overdraft credit features that may be offered in conjunction with prepaid accounts was scheduled to take effect on October 1, 2017. However, the Bureau agreed to postpone the effective date by six months to “facilitate compliance with the Prepaid Account Final Rule, and to allow an opportunity for the Bureau to assess whether any additional adjustments to the Rule are appropriate.” The rule will take effect on April 1, 2018.
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