On Friday, May 22, 2015, the CFPB released its Spring 2015 Rulemaking Agenda (Agenda), as mandated by the Regulatory Flexibility Act. These biannual agendas generally include details regarding rulemaking activity at the pre-rule, proposed rule, final rule, long-term and completed stages of rulemaking. Although not particularly surprising, this Agenda includes summaries and timing expectations with regard to a number of the ongoing rulemakings, specifically with regard to forthcoming proposed rules, rules to be finalized and rules following up on previously finalized mortgage-related rules.
Rules To Be Proposed
The CFPB expects to issue a Notice of Proposed Rulemaking later in 2015 with regard to the small dollar lending market as a follow-up to the outline of proposals released on March 26, 2015. For more of those proposals, please see Locke Lord’s QuickStudy “CFPB Looks to End Consumer Debt Traps”, dated April 6, 2015.
Proposed Rules To Be Finalized
The CFPB proposal to define “larger participants” in the auto-lending market is expected to be finalized early this summer. If the Proposed rule is adopted without change, it would, among other things: (1) define certain nonbank covered persons as larger participants of the market for automobile financing that would include grants of credit for the purchase of an automobile, refinancings of such credit obligations and any subsequent refinancings thereof, purchases or acquisitions of such credit obligations (including refinancings), automobile leases, and purchases or acquisitions of automobile lease agreements; and (2) define, pursuant to section 1002(15)(A) (xi)(II) of the Dodd-Frank Act, the term “financial product or service” to include certain types of automobile leases that banks are authorized to offer and that the CFPB finds have or likely will have a material impact on consumers.
Rules on prepaid financial products are also being worked on for finalization; although the CFPB doesn’t expect to release the final rules until early 2016. The proposal on prepaid financial products was released in December of 2014 and, if finalized as proposed, would signal a major overhaul of consumer protections for prepaid financial products, such as general-purpose reloadable prepaid cards and digital wallets. The proposed protections, as the CFPB indicates, would be similar to the protections currently in place for debit and payroll cards. For example, the proposed protections include rules on error resolution, liability when a card is lost or stolen, as well as more significant protections for prepaid products that access overdraft services or offer credit features for a fee. Prepaid products with those features would be treated like credit cards under TILA and Regulation Z.
Follow-Up On Mortgage Rules
With regard to CFPB rulemakings relevant to the mortgage market, the CFPB expects to release a final rule with updates to the Home Mortgage Disclosure Act (HMDA), as required by section 1094 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including changes to HMDA institutional and transactional coverage and reporting requirements as well as clarifications to existing regulatory obligations, in late summer 2015. If finalized as proposed, the rule would, among other things: (1) modify the tests for determining which financial institutions and housing-related credit transactions are covered under HMDA; (2) require financial institutions to report new data points; and (3) require financial institutions with large numbers of reported transactions to submit their HMDA data on a quarterly, rather than annual, basis.
In addition to rules implementing changes to HMDA, the CFPB expects to issue final rules clarifying and amending certain aspects of the mortgage rules released in January of 2013. For instance, the CFPB is expecting to follow-up on a proposed rule it issued in February of 2015 regarding small creditors. A final rule implementing changes to small creditor requirements under the Ability to Repay and Qualified Mortgage rules is expected in the fall of 2015. The CFPB also expects to issue a final rule in the spring of 2016 that will finalize a December 2014 proposal to modify certain sections of the mortgage servicing final rules released in 2013. The December 2014 proposal, if finalized, would affect certain required disclosures, early intervention requirements, loss mitigation standards and situations where a consumer is a successor in interest, is in bankruptcy or exercises certain rights under the Fair Debt Collection Practices Act (FDCPA).
Finally, the CFPB indicated that it continues to support implementation efforts underway as the mortgage industry prepares for the August 1, 2015 effective date for the new TILA-RESPA Integrated Disclosure (TRID) regime.
The CFPB blog post announcing the Spring 2015 Regulatory Agenda can be found here.
Locke Lord has a dedicated team of compliance and litigation attorneys who have significant experience handling various aspects of consumer finance. Locke Lord attorneys regularly advise financial institutions on regulatory compliance matters, new product development and represent clients in regulatory enforcement matters, class actions and various lawsuits in the U.S. and abroad. Visit our Consumer Finance Regulatory Practice Group website at or contact the author with questions of for more information.
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