Compliance Blog

New Year’s Resolutions Part 2: The CFPB

Last week, we blogged about FinCEN’s “New Year’s Resolutions,” as laid out in the Fall 2021 Rulemaking Agendas they published in December. Today we’ll take a look at the agenda of another federal regulator – the Consumer Financial Protection Bureau (CFPB).

The CFPB’s Fall 2021 regulatory agenda was relatively short. The Bureau put out a blog post, saying that the agenda “reflects the continuation of significant rulemakings that further our consumer financial protection mission and help to advance the country’s economic recovery from the financial crisis related to the COVID-19 pandemic.” The blog also states the Bureau anticipates that Director Rohit Chopra’s priorities will be “more fully reflected in the Spring 2022 agenda.”  Here’s what is on the Fall 2021 Agenda:

  • Section 1033 Rulemaking: In the pre-rule stage, a possible rule to implement section 1033 of the Dodd-Frank Act. Section 1033 seeks to create uniform standards for “covered persons” (such as credit unions) to make transactional data available to consumers. This is related to an Advanced Notice of Proposed Rulemaking published by the Bureau in November 2020, and this September 2021 report from the Congressional Research Service. The agenda says that pre-rule activity can be expected around April 2022.
  • PACE Financing: In the pre-rule stage, a possible rule regarding Property Assessed Clean Energy (PACE) financing. This rulemaking is required by 2018’s Economic Growth, Regulatory Relief, and Consumer Protection Act, which instructed the Bureau to apply Truth in Lending Act’s ability-to-repay provisions to PACE financing, as well as civil liability for violating those provisions. This is related to a May 2019 Advanced Notice of Proposed Rulemaking. The agenda states pre-rule activity is expected around October 2022.
  • Small Business Data Collection: In October 2021, the Bureau published a Proposed Rule to implement section 1071 of Dodd-Frank, relating to data collection and reporting requirements for small business loans. The rule aims to protect small business owners from unlawful discrimination. Comments on the proposed rule were due by January 6, 2022. The agenda says the next step is for the Bureau to review the comments it receives but does not say when a final rule might be expected. NAFCU has sent a letter to the CFPB on this topic on behalf of our members and has also published a regulatory alert (member only) which breaks down this proposed rule.
  • AVMs: The CFPB states that it is working with several other regulatory agencies (including NCUA) to develop a proposed rule that would implement quality control standards for automated valuation models (AVMs) in appraisals. The agenda says a proposed rule is expected in June 2022.
  • LIBOR Transition: The regulatory agenda promised a final rule by January 2022 on the transition away from the London Interbank Offered Rate (LIBOR) index. As promised, the CFPB published their final rule on the LIBOR transition back in December 2021, which amends Regulation Z to address the transition away from LIBOR. To provide some context on this topic: credit unions and other financial institutions rely on the London Interbank Offered Rate (LIBOR) index for certain products, such as HELOCs, adjustable rate mortgages, and more. However, the UK Financial Conduct Authority has announced it will stop publishing LIBOR at some point in 2023, creating a need for credit unions to switch to a different index for those products. Prior to the December 2021 final rule, the CFPB issued a proposed rule in June 2020. The CFPB also published this LIBOR transition FAQ last month, which may be useful to credit unions. 

The CFPB has also taken action outside of the topics covered in the Fall 2021 rulemaking agenda. For example, the bureau sent a series of orders last month seeking to collect information on Buy Now Pay Later services, and issued joint letters with the Department of Justice regarding protections for servicemembers under the Servicemembers Civil Relief Act.

Keep reading the Compliance Blog for updates on these new regulations as they’re published by the CFPB.

About the Author

Nick St. John, NCCO, NCBSO, Regulatory Compliance Counsel, NAFCU

Nick St. John, Regulatory Compliance Counsel, NAFCUNick St. John, was named regulatory compliance counsel in March 2020. In this role, Nick helps credit unions with a variety of compliance issues.

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