On July 20, 2017, the CFPB announced that updates to its Spring 2017 rulemaking agenda have been posted online on the Office of Management and Budget’s webpage. The amended agenda highlights both areas of anticipated regulatory focus as well as recent rule changes that the CFPB is already in the process of implementing.
According to the amended agenda, in the coming months, the CFPB’s rulemaking efforts will focus on payday lending, auto title loans, debt collection, and checking account overdraft protection rules. In the area of payday lending and auto title loans, the CFPB expressed concern that the typical product structures of those loans, along with what it characterizes as questionable underwriting practices, result in consumers being “trapped” into “extended cycles of debt” and causing consumers to incur unanticipated fees. While the CFPB has identified payday lending and auto title loans as areas of concerns, it is presently considering stakeholder comments and has not presently set forth a time frame to commence the rulemaking process.
On the debt collection front, the CFPB promised in its amended agenda to issue a new proposed rule later in 2017, relating to debt collection communication practices and consumer disclosures. The CFPB also states that the proposed debt rules will respond to industry concerns that the FDCPA needs to be clarified so that debt collectors understand how the FDCPA applies given advancements in communication technology in the decades since the statute was first passed. The CFPB also stated that it is looking into expanding debt collection rulemaking to first party debt collectors. Presently the FDCPA only regulates third-party debt collectors (i.e., entities that purchase the right to collect on debts originated by other entities), and does not apply to first-party debt collectors (entities that seek to collect on debts which they originated). This expansion in coverage could mean that, as we first reported in 2014, the CFPB may attempt to use its Dodd Frank powers to regulate unfair and deceptive practices to expand the scope of the FDPCA to first-party debt collectors, even though the statute explicitly excludes them.
Finally, the amended agenda indicates that the CFPB has targeted checking account overdraft programs as a target for future rulemaking. The CFPB notes that, although consumers can opt out of overdraft fees at ATMs and points of sale, the complexity surrounding such fees leads to consumer confusion, which current regulations do not adequately address and prevent. Although the CFPB is considering rulemaking in this area, it has yet to state what specific regulatory changes it might implement.
The CFPB’s updates to its regulatory agenda also highlighted some of its recent regulatory efforts over the past several months. Those efforts include tweaks to the “know before you owe” mortgage rule; streamlined data mortgage origination; data collection rules under HMDA; rulemaking relating to prepaid financial products; and the well-publicized, recently-released arbitration rule, which prohibits financial services companies from using arbitration clauses in consumer contracts as a means to prevent class action suits from being filed.
As always, LenderLaw Watch will continue to monitor the CFPB’s rulemaking efforts and provide updates as they arise.