Weekly RoundUp March 18, 2021

CFPB Revokes 2020 Statement of Policy Regarding Prohibition on Abusive Acts or Practices

Editor’s Note

In this Issue. The Consumer Financial Protection Bureau (CFPB) announced the rescission of its 2020 Statement of Policy Regarding Prohibition on Abusive Acts or Practices, possibly signaling an increase in enforcement activity in this area; five federal agencies requested public comment on proposed Interagency Questions and Answers Regarding Private Flood Insurance; and the Small Business Administration (SBA) updated its Paycheck Protection Program (PPP) FAQs and calculation guidance documents to reflect new options available to PPP applicants filing Schedule C to use gross income to calculate their loan amount. These and other developments are discussed in more detail below.

We also invite you to visit Goodwin’s Coronavirus Knowledge Center, which is updated regularly, to learn how cross-industry teams at Goodwin are helping clients to fully understand and assess the ramifications of COVID-19, navigate the potential effects of the outbreak on their businesses and evaluate whether and how to safely reopen.
Editor’s Note
Editor’s Note
Editor’s Note

Regulatory Developments

CFPB Rescinds Statement of Policy Regarding Prohibition on Abusive Acts or Practices

On March 11, the CFPB announced the rescission of its Statement of Policy Regarding Prohibition on Abusive Acts or Practices issued on January 24, 2020. The 2020 Statement of Policy provided a framework for the CFPB’s exercise of its supervisory and enforcement authority to address abusive acts or practices and was intended to clarify what was regarded by many to be an unclear standard. However, in rescinding the Statement of Policy, the CFPB indicated that, based on its experience, the principles set forth in the Statement of Policy do not actually deliver clarity to regulated entities and further concluded that the Statement of Policy undermined deterrence, was inconsistent with the CPPB’s duty to enforce the standards established by Congress in Section 1031(d) of the Dodd-Frank Act, and was contrary to the CFPB’s mission to protect consumers. The CFPB also indicated that it intends to exercise its supervisory and enforcement authority, while considering good faith, company size and all other factors that the CFPB typically considers in applying its prosecutorial discretion. The rescission has been interpreted by many as a signal that the CFPB intends to increase its enforcement activity in this area.

Agencies Release Proposed New Interagency Questions and Answers Regarding Private Flood Insurance

On March 11, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration and Farm Credit Administration requested public comment on 24 proposed Interagency Questions and Answers Regarding Private Flood Insurance. The proposal is intended to help lenders comply with the agencies’ joint rule promulgated in 2019 to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012. The proposal incorporates new questions and answers in a number of areas including:

  • Mandatory Acceptance;
  • Discretionary Acceptance, and
  • Private Flood Insurance General Compliance.

These Questions and Answers would supplement the 118 Interagency Questions and Answers Regarding Flood Insurance that the agencies proposed on July 6, 2020. Comments will be accepted for 60 days after publication in the Federal Register.

SBA Updates Guidance for Lenders on Revising Schedule C PPP Applications

On March 12, the SBA updated its Paycheck Protection Program FAQs and calculation guidance documents to reflect new options available to PPP applicants filing Schedule C, including self-employed individuals, sole proprietors and independent contractors, to use gross income to calculate their loan amount. The updated FAQs added a new FAQ 66, which addresses the options that lenders have to assist Schedule C filers who have already submitted a PPP loan application to use gross income to calculate their PPP loan amount.

Goodwin News

How CSR and ESG Have Become More Important Than Ever

Now more than ever, companies are held accountable for making a positive impact on social, economic and environmental aspects of society. Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) have become a priority for many organizations as they assess their responsibility to their employees and the broader community, as well as consider the merits of certain corporate structures, including benefit corporations and corporate foundations.

Read our interview featuring Goodwin’s CSR + ESG practice leaders Danielle Reyes and Carl Owens, who sat down with our client relations team to discuss why the work for clients across the practice is more important than ever and how it impacts our clients’ businesses and industries.

Goodwin Financial Industry Blog Updates

Check out Goodwin’s latest thought leadership on finance industry happenings across our blogs.

FinReg+Policy Watch

DOL Will Not Enforce Its Own ESG Rule, But Fiduciaries Should Not Ignore it
SEC Staff Seeks Input on Cross Trading Between Affiliated Funds
SEC’s Crenshaw Proclaims “Enforcement for Everyone”

LenderLaw Watch

State Statute Prohibiting Surcharges on Credit Card Purchases Held Unconstitutional
CFPB Issues Report on Housing Insecurity and COVID-19

This week’s Roundup contributors: Joshua Burlingham.

NYDFS Consent Order Signals Regulator’s Growing Focus on Financial Institutions’ Incident Responses and Security Practices.