CFPB Slates Debt Collection, Mortgage Data Rules For Fall

By Jon Hill
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Banking newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!

Law360 (July 1, 2020, 10:57 PM EDT) -- The Consumer Financial Protection Bureau said Tuesday that it expects to finalize first-of-their-kind debt collection regulations and propose changes to mortgage data reporting requirements this fall, previewing plans that would buck calls for a rulemaking moratorium during the coronavirus pandemic.

In a blog post announcing the publication of its latest regulatory agenda, the CFPB also highlighted other rulemaking activities that it is planning for the coming months, but didn't address when its overdue payday lending rule rewrite might cross the finish line.

"We have taken several steps in response to the COVID-19 emergency, even as we have continued to move forward with our other regulatory work," the CFPB said in its post, which was authored by the head of its regulations office, Susan Bernard.

The agency has been "prioritizing activities intended to protect the stability of the financial sector and enhance its recovery once the public health crisis has passed, as well as protecting consumer financial well-being during and after the COVID-19 emergency," the post added.

Consumer advocates and others have urged the CFPB to temporarily halt rulemaking work unrelated to the pandemic, arguing that the agency should stay focused on responding to the crisis and shouldn't be making policy when the public is too distracted to provide meaningful feedback.

Although the agency has extended some comment periods since the start of the pandemic, it has also issued draft and final rules, including a significant proposal to replace a "patch" in its mortgage underwriting regulations that expires next year, one that lenders rely on.

Tuesday's regulatory agenda reflects planning work that began before the pandemic, but the CFPB said in its accompanying blog post that it plans to "move these and other pending regulations forward" later this year and into next spring.

The agency also outlined other key rulemaking initiatives that it expects to make progress on in the coming months.

Among them are rules proposed last year that would clarify consumer communication standards for debt collectors and restrict certain collections practices, marking the first regulations ever issued under the Fair Debt Collection Practices Act, a four-decade-old federal law that governs the industry.

The CFPB said Tuesday it plans to take final action on these draft rules in October, with more action coming "at a later date" to finalize a recent proposal that focused on time-barred debt disclosures.

The agency said it's also planning to float new Home Mortgage Disclosure Act rules this fall that would address what information lenders are required to report and how the collected data is publicly disclosed "in light of consumer privacy interests," hinting at possible curtailment.

In addition, the CFPB said it may put out another proposal before the end of the year that would call for extending the "qualified mortgage" safe harbor in its mortgage underwriting regulations to some home loans "when the borrower has consistently made timely payments for a period."

Still on schedule for release this fall are the first glimpses of how the CFPB might implement a Dodd-Frank Act mandate to collect and publish data on lending to women-owned, minority-owned and small businesses. The agency said it expects to issue an initial outline of ideas in September and convene a small-business review panel the following month, tracking the terms of a settlement reached with consumer advocates earlier this year.

But the CFPB offered no update on its effort to repeal the underwriting provisions from its 2017 payday lending regulations. The agency said earlier this year it would complete the controversial rulemaking project in April, and in the new regulatory agenda released by the agency, June was slated for final action.

Both those deadlines have come and gone with no movement from the CFPB, and agency representatives did not respond to questions about the status of the rule on Wednesday.

The CFPB's leadership could be facing a deadline of its own in the wake of this week's Supreme Court decision striking down the tenure protection given to its director. If a Democrat wins the White House this November, that ruling would enable the new president to replace the CFPB's current Trump-appointed director, Kathleen Kraninger, and redirect its policy.

Also unclear is the status of an interagency rule sought by the banking industry that would codify a 2018 statement issued by the CFPB and other banking agencies on the limits of supervisory guidance. Tuesday's agenda indicated that the regulators had at one point planned to issue such a proposal in June, but the CFPB offered no revised timetable in its blog post.

The agency did say, however, that it will be working with other regulators in the coming months on long-in-the-works quality control standards for automated valuation models used in appraisals.

"Finally, as required by the Dodd-Frank Act, we will continue to monitor markets for consumer financial products and services to identify risks to consumers and the proper functioning of such markets," the agency said in its post. "Our market monitoring work assists in identifying issues for potential future rulemaking work."

--Editing by Adam LoBelia.

For a reprint of this article, please contact

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!