President Biden formally submitted his nomination of Rohit Chopra, who is currently serving as an FTC Commissioner, as CFPB Director in February 2021. The Senate Banking Committee held Chopra’s confirmation hearing in March 2021 and Chopra awaits a vote before the full Senate. Currently the CFPB is under the leadership of Acting Director Dave Uejio, who has said the Bureau’s priorities will include fair lending enforcement, racial equity, and continued pandemic relief efforts. Former Director Kathy Kraninger, who had been nominated by President Trump and confirmed by the Senate in 2018, resigned in January 2021.
Regulatory and Legislative Priorities
NAFCU is excited to work with Acting Director Uejio to ensure a healthy regulatory environment in which credit unions can grow, thrive and successfully serve their membership. Previously, NAFCU shared credit unions' concerns and priorities with Director Kraninger, and highlighted the value of credit unions to the nation’s economy and, in particular, individuals of modest means. At a March 2019 meeting with Kraninger, NAFCU President and CEO Dan Berger discussed issues relevant to credit unions, including: implementing provisions of the NAFCU-backed Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155), reporting on Home Mortgage Disclosure Act (HMDA) data, ensuring fintech competes on a level playing field with credit unions, the CFPB’s proposed changes to its Payday Rule, and compliance with the TILA/RESPA integrated disclosure (TRID) rule.
Additionally, in July 2020, NAFCU wrote to the House Financial Services Committee (HFSC) and the Senate Banking Committee preceding their semi-annual oversight hearings of the CFPB. NAFCU reiterated its support of Kraninger’s efforts to provide financial institutions with targeted relief and regulatory certainty. NAFCU has also urged Kraninger to consider keeping a modified debt-to-income ratio in regards to their qualified mortgage rulemaking and modernize the Electronic Signatures in Global and National Commerce Act.
The CFPB recently took action on several notable rulemakings/issues, and NAFCU remains actively engaged to ensure credit unions’ concerns are taken into account:
- Home Mortgage Disclosure: CFPB finalized adjustments to data collection and reporting thresholds in April 2020. NAFCU staff and member credit unions met with the CFPB to discuss HMDA-related issues in March 2021. CFPB’s latest regulatory agenda did not include any new rulemaking efforts.
- Debt Collection: In January 2021 the CFPB finalized its debt collection rule for third-party debt collectors, which established a strict liability standard and prohibited legal actions on time-barred debts. The rule also requires debt collectors to contact consumers about debts before passing information to a credit reporting agency. NAFCU provided a summary and analysis of the rule in a Final Regulation. An earlier final rule, published in November 2020, establishes time, place, and manner restrictions for third-party debt collectors’ communications with consumers and provides consumers with the ability to designate a means of communication that debt collectors cannot use to contact them.
- Qualified Mortgage Definition: The CFPB issued the QM final rule in December 2020. The rule governs how mortgage lenders determine a borrower’s ability to repay and establishes other criteria. NAFCU analyzed the details of the rule in a Final Regulation. Additionally, the CFPB published a separate final rule to set the definition of a “seasoned qualified mortgage.” The effective date for the QM rule was delayed to October 1, 2022.
- UDAAP: In March 2021, Acting Director Uejio rescinded the CFPB’s policy statement on the “abusive” prong of UDAAP, which was initially released in January 2020. NAFCU continues to advocate for regulatory certainty on the meaning of “abusive” acts or practices.
- Section 1071: NAFCU staff met with the CFPB in July 2021 to discuss potential rulemaking efforts on reporting requirements for small business lending under Section 1071 of the Dodd-Frank Act. This followed the CFPB’s release of an outline of proposals for implementing this requirement, which NAFCU analyzed in a Regulatory Alert. NAFCU is urging the CFPB to exempt credit unions from any data collection requirement under Section 1071.
- Section 1033: In October 2020 the CFPB published an advance notice of proposed rulemaking on consumers’ rights to access their financial records under Section 1033 of the Dodd-Frank Act. NAFCU’s comment to the CFPB emphasized the need for protecting data privacy and security as well as ensuring credit unions are not overly burdened with compliance costs. NAFCU staff met with the CFPB to discuss this issue further in March 2021.
In its Spring 2021 rulemaking agenda, the CFPB listed proposed rules on business lending data, control standards for automated valuation models, and mortgage servicing in connection to the end of pandemic-related forbearances.