Every month we organize a 30 minutes online seminar Outlining the month’s key announcements and Consumer Financial Protection Bureau (CFPB) takeaways for financial service providers to consider. In this month’s article, we share some of our best “bites” covered during the August 18 webinar.
So what happened at CFPB last month?
Bite # 10 – The CFPB celebrated its 10th anniversary.
On July 19, Americans for Financial Reform (AFR) invited CFPB Acting Director Dave Uejio to speak at a CFPB 10th anniversary celebration. He said one of CFPB’s most valuable assets is the consumer compliance process. Since 2011, the CFPB has received more than 3 million complaints and 99% of complaints sent by the CFPB to companies have been answered on time. He also mentioned the CFPB’s focus on promoting racial and economic equity in the consumer market and touched on its response to COVID-19. Acting Director Uejio also posted a blog on July 21 summarizing CFPB’s accomplishments over the past 10 years.
Bite # 9 – The CFPB found that most credit applications have returned to pre-pandemic levels.
The CFPB released a report showing that credit applications have mostly returned to pre-pandemic levels. According to the report, prime and near-prime consumers are driving the recovery. Consumer credit applications remain down for subprime and deep subprime applicants. The report provides a state-by-state analysis of the evolution of credit applications for auto loans, new mortgages and revolving credit cards showing great geographic variability in the demand for auto loans.
Bite # 8 – The CFPB has released an online tool to help tenants and landlords access federal assistance.
The CFPB has published an online tool to help tenants and landlords access federal assistance. The tool, called Rental Assistance Finder (available at www.consumerfinance.gov/renthelp) connects tenants and landlords with state and local programs distributing federal aid to help tenants. The CFPB also demonstrated the Rental Assistance Finder via Webex on July 28. website, consumerfinance.gov/housing, which serves as the federal government’s one-stop resource for up-to-date information on relief options, protections and key timelines.
Bite # 7 – The CFPB and FHFA have released updated data from the National Mortgage Arrangement Survey for the public.
The CFPB and FHFA have released updated data on the level of public lending collected as part of the National Mortgage Survey (NSMO). Since 2014, the FHFA and the CFPB have sent quarterly surveys to borrowers who have recently obtained a mortgage. The surveys collect feedback on borrowers’ experiences during the mortgage loan process, their perceptions of the mortgage market and their future expectations. The recent publication adds two more years of new mortgage data to 2019.
Bite # 6 – The district court appears to be close to a decision on making rules on high-cost payday loans, securities and installment loans.
The United States District Court for the Austin Division of the Western District of Texas has requested additional information regarding an implementation schedule in Community Financial Services Association of America, LTD., Consumer Service Alliance of Texas v. Consumer Financial Protection Bureau.
The case concerns the legality and implementation of the 2017 regulation, sometimes referred to as the “payday rule”. The additional briefings were aimed at determining the appropriate compliance date should the tribunal dismiss the industry’s petition and render a decision in favor of the CFPB. Briefs and response briefs have been filed. The request suggests that the Court will allow the CFPB’s motion for summary judgment. CFPB appears to be asking for 30 days while industry is asking 286 to 445 days for implementation.
Piece # 5 – The CFPB has confirmed the effective date of the final debt collection rules.
The CFPB has confirmed the date of entry into force of the final debt collection rules. In a CFPB proposal released in April 2021, the CFPB had considered extending the effective dates to January 29, 2022. But, the CFPB has now determined that the extension is not necessary. Following this announcement, the CFPB will issue a formal notice to the Federal Register withdrawing the April 2021 proposal.
The first of two debt collection rules, released in October 2020, focuses on debt collection communications and clarifies the FDCPA’s prohibitions on harassment and abuse, false or misleading statements, and unfair practices by debt collectors. recovery when collecting consumer debts.
The second rule, released in December 2020, clarifies what information debt collectors must provide to consumers at the start of collection communications. It also prohibits debt collectors from suing or threatening to sue consumers for prescribed debts and requires debt collectors to take specific steps to disclose the existence of a debt to consumers before disclosing information about the debt. to a consumer information agency.
The CFPB will consider additional guidance for debt collectors, including those who handle mortgages, if necessary. The CFPB has indicated that it recognizes that mortgage agents are expected to receive a potentially historically high number of loss mitigation applications in the fall, as large numbers of borrowers exit forbearance and, as a result, Mortgage agents in particular may face capacity constraints.
Piece # 4 – CFPB has updated its Small Entity Mortgage Services Compliance Guide.
In June of this year, the CFPB published its Final rule to amend Regulation X to help mortgage borrowers affected by the COVID-19 pandemic. The Small Entity Compliance Guide published on August 4, includes guidance for the final rule and the COVID-19 Provisional Final Rule on Mortgage Services 2020. The rules aim to promote a “smooth and orderly transition” of lockdown protections related to the pandemic, allowing meaningful loss mitigation options, streamlined changes and information on pre-lockout options. With the rules in place, the CFPB has indicated that borrowers coming out of forbearance will have the option of resuming their regular mortgage payments, reducing their monthly mortgage payments or selling their home. The final rule goes into effect on August 31, 2021 and expires in October 2022.
Bite # 3 – The CFPB has published an interpretive rule on the schedule requirements for the June 17, 2021 federal holiday.
The CFPB has published a rule of interpretation to help the mortgage industry determine whether to treat June 19, 2021 as a federal holiday or a business day for the purpose of complying with certain time-sensitive borrower protections. Since the June National Independence Day Law was enacted two days before the newly created public holiday on June 19, the CFPB reported that many in the mortgage industry said they did not know how to deal with the day. for regulatory compliance purposes with Reg Z.
For the cancellation of Fixed Mortgages and Integrated Disclosures TILA-RESPA, whether June 19, 2021, counts as a business day or federal holiday depending on the start of the relevant period. If the relevant period has started:
- By June 17, 2021, June 19 was a business day.
- After June 17, 2021, then June 19 was a federal holiday.
In addition, the rule of interpretation explains that creditors are not prohibited from providing longer periods than required.
Bite # 2 – The CFPB released a report on pandemic measures for mortgage agents.
In spring 2021, the CFPB obtained data from 16 major mortgage loan managers to identify areas of risk in managers’ response to the COVID-19 pandemic as part of its prudential oversight. The Report presents data from December 2020 to April 2021 and CFPB observations based on the data. The CFPB concluded that:
- Some populations of borrowers of these services may have difficulty establishing direct contact and obtaining assistance from certain services.
- A growing number of borrowers are moving outside of COVID-19 hardship tolerances with past due status, and some service officers are significantly underperforming their peers on key efficiency measures.
The CFPB encourages repairers to:
- Improve their communication skills;
- Improve awareness efforts
- Educate and assist all borrowers in resolving default issues and enroll in widely available assistance and loss mitigation options.
The CFPB also indicated that service providers should ensure that their compliance management systems include robust measures to identify and mitigate fair lending risk.
Bite # 1 – CFPB took action against a debt collector.
The CFPB has filed a settlement proposal to resolve a lawsuit against a debt collection company and its owner. The CFPB alleged that the company violated the Consumer Financial Protection Act of 2010, the Fair Credit Reporting Act (FCRA) and Regulation V (the Furnisher Rule) by failing to implement reasonable written policies and procedures regarding the accuracy and integrity of the information it has provided. to credit bureaus and failing to conduct reasonable investigations into indirect consumer disputes, which results in inaccurate information remaining on consumers’ credit reports.
The CFPB also alleged that the company and its owner violated the Fair Debt Collection Practices Act by stating that consumers owed certain debts when the company did not have a reasonable basis for claiming that consumers owed those debts. If reached in court, the settlement would require the company to put in place reasonable policies and procedures to prevent future violations and pay a civil fine of $ 850,000.
Extra Bite: The FFIEC has published guidelines on authentication and access to services and systems of financial institutions.
The Federal Financial Institutions Review Board (FFIEC), on behalf of its members (including the CFPB), issued advice which offers financial institutions examples effective authentication and risk management principles and practices for customers, employees and third parties accessing digital banking services and information systems. The new guidelines replace previous documents published in 2005 and 2011.