In dissecting the CFPB’s recently published Semi-annual Report, which included Acting Director Mick Mulvaney’s recommended changes for imposing “meaningful accountability” on the regulatory agency, one of the most critical pieces of information for bank risk and compliance management is the list of proposed and final rules the CFPB anticipates working on in the near term.

Upcoming Proposed Rules Per CFPB Semi-annual Report

The report highlighted four regulatory areas in which the CFPB plans to issue proposed rules:

1. Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule: This rule, also known as the Payday Lending Rule, was issued under former CFPB Director Richard Cordray on October 5, 2017 and published in the Federal Register on November 11, 2017. On the final rule’s effective date of January 16, 2018, the CFPB, under Acting Director Mulvaney, announced plans to begin the rulemaking process to reconsider the Payday Lending Final Rule. On March 27, Democratic Senators sent Mulvaney a letter opposing this action. The compliance date for most provisions in the Payday Lending Final Rule is August 19, 2019, giving covered financial institutions a reprieve from taking any further action to implement the rule until the CFPB specifies its exact plans for it.
2. The Expedited Funds Availability Act (Reg CC): According to the Semi-annual Report, “The Bureau will work with the Board of Governors of the Federal Reserve System to issue jointly a rule that includes provisions within the Bureau’s authority.”
3. Debt Collection: This issue has been on the CFPB’s radar for some time. The Bureau has conducted surveys and analyzed comments regarding the communication and disclosure practices of debt collectors. In its Spring 2017 Rulemaking Agenda, the CFPB noted plans to propose a debt collection rule in late 2017. While that did not happen prior to Cordray’s resignation, the Semi-annual Report makes clear that this issue remains a priority for the CFPB under Mulvaney, albeit the extent to which any proposed rule goes is still uncertain.
4. Home Mortgage Disclosure Act (Reg C): The HMDA Final Rule of October 2015 went into effect on January 1, 2018, however, on December 21, 2017, the CFPB announced plans to “open a rulemaking to reconsider various aspects of the 2015 HMDA rule.” The Semi-annual report reiterates this intention, indicating that the institutional and transactional coverage tests along with the rule’s discretionary data points will be a part of this reconsideration process. While financial institutions likely welcome possible changes to the coverage tests, covered institutions have already invested heavily to enable themselves to gather the HMDA Final Rule’s new slate of data points, making fuzzy the potential benefit of changes to this aspect of the rule.

In the next post in this Series, Inside CFPB’s Semi-annual Report, I’ll tackle the upcoming Final Rules indicated by the CFPB.

On April 2, 2018, Mick Mulvaney issued the Consumer Financial Protection Bureau’s (CFPB) Semi-annual Report, his first such report since being named the CFPB’s Acting Director by President Trump on November 24, 2017. The report covers the period of April 1, 2017 to September 30, 2017.

It begins with an unsurprising recommendation from Mulvaney to rein in the power of the CFPB, an agenda which has been evident since the start of his tenure as acting director and is in accordance with the Trump administration’s deregulation stance and in line with the philosophy of many majority members of Congress.

“As has been evident since the enactment of the Dodd-Frank Act, the Bureau is far too powerful, and with precious little oversight of its activities.” 

Mick Mulvaney, Acting Director of the Consumer Financial Protection Bureau

In his message, Mulvaney also outlined his recommendation for recalibrating the CFPB:

1. Fund the CFPB through Congressional appropriations – This is an idea that has been advocated by other critics of the Dodd-Frank Act. For comparison, some other federal financial regulators are not funded this way, including the Office of the Comptroller of the Currency (OCC), which is funded primarily by assessments on the institutions it supervises.
2. Require legislative approval of CFPB major rules – Again, by comparison, the OCC does not require such approval. According to the OCC’s mission statement, it “has the power to” among other things “issues rules and regulations.”
3. Ensure that the CFPB Director answers to the President in exercising and executing executive authority.
4. Create an independent Inspector General for the CFPB.

Stay tuned for Part 2 of this series to learn about what the CFPB’s Semi-annual report says about its upcoming rule proposals and final rules.