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Today, the CFPB published its spring 2016 Rulemaking Agenda in the Federal Register. There were few surprises in the agenda, but it continues to show that there are several pending rulemakings, which will impact credit unions, and could increase the regulatory burdens they are facing. Reflecting other recent announcements from the CFPB, both the small-dollar loan rulemaking and the arbitration rulemaking are in the proposed rule stage. Debt collection and overdraft remain in the pre-rule stage, which we believe indicates SBREFA panels could be held in the timeframes highlighted in the agenda. Rules on prepaid cards, amendments to the 2013 TILA/RESPA mortgage rule, and the Expedited Funds Availability Act are also in their final rule stage.
Here are some of the highlights of the agenda that are relevant to credit unions:
Overdraft (Pre-rule activity projected August 2016)
The CFPB is engaged in pre-rule making activities to consider potential regulation of overdraft services on checking accounts. In June 2013, the CFPB issued a white paper summarizing the CFPB's initial findings from its analysis of overdraft practices. The white paper, which was based on supervisory data from several large banks, highlighted CFPB concerns including how consumers opt in to overdraft coverage for ATM and one-time debit card transactions, overdraft coverage limits, transaction posting order practices, overdraft and insufficient funds fee structure, and involuntary account closures. In July 2014, the CFPB released a report, based on data from the same sources, providing additional information about the outcomes of consumers who do and do not opt in to overdraft coverage for ATM and one-time debit card transactions. The July 2014 report also explored the transactions that overdraw consumer accounts. The CFPB is continuing to engage in additional research and has begun consumer testing initiatives relating to the opt-in process.
Debt collection (Pre-rule activity projected June 2016)
The Bureau is engaged in developing proposed rules to regulate debt collection practices under the Fair Debt Collection Practices Act. In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking seeking comment, data, and information from the public about debt collection practices, and in January 2014, the CFPB extended the comment period to February 28, 2014.
Payday, auto title, and similar lending products (Proposed Rule expected June 2, 2016)
In the next several weeks the Bureau expects to release a Notice of Proposed Rulemaking to address consumer harms from practices related to payday loans, auto title loans, and other similar credit products, including failure to determine whether consumers have the ability to repay without default or reborrowing and certain payment collection practices.
Arbitration (Rule proposed waiting for publication in federal register)
The Bureau issued a Notice of Proposed Rulemaking earlier this month concerning the use of agreements providing for arbitration of any future dispute between covered persons and consumers in connection with the offering or providing of certain consumer financial products or services.
Prepaid accounts (Final rule expected in July 2016)
The Bureau also expects to issue a final rule this summer for prepaid financial products, such as general purpose reloadable cards and other similar products, which are increasingly being used by consumers in place of traditional checking accounts.
Mortgage servicing (Final rule expected in July 2016)
The Bureau expects to issue a final rule this summer to amend a proposal published in December 2014 to amend certain aspects of mortgage servicing rules that took effect in 2013. The proposal addressed, among other things, enhanced loss mitigation requirements and compliance with certain rules when the borrower is a potential or confirmed successor in interest or is in bankruptcy.
Know Before You Owe mortgage disclosure (TRID) rule (Proposed rule expected in July 2016)
This summer the Bureau expects to release a Notice of Proposed Rulemaking to make small clarifications and provide further regulatory guidance concerning its rule combining several federal mortgage disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The project to integrate and streamline the disclosures was mandated under the Dodd-Frank Act and took effect in October 2015.
Women-owned, minority-owned, and small businesses data collection (Pre-rule activity December 2016)
The Bureau is also in the very early stages of starting work to implement section 1071 of the Dodd-Frank Act, which amends the Equal Credit Opportunity Act to require financial institutions to report information concerning credit applications made by women-owned, minority-owned, and small businesses. The Bureau will focus on outreach and research to develop its understanding of the players, products, and practices in the small business lending market and of the potential ways to implement section 1071. The CFPB then expects to begin developing proposed regulations concerning the data to be collected and determining the appropriate procedures and privacy protections needed for information-gathering and public disclosure.
Implementation of other mortgage rules
The CFPB is working to implement Dodd-Frank Act amendments to Home Mortgage Disclosure Act (HMDA). The Bureau released a small entity compliance guide in connection with the rule, which was finalized in October 2015. Though certain elements of the rule take effect in January 2017, most new data collection requirements take effect in January 2018.
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