The CFPB in the Future

By: Bill Elliott, CRCM, Senior Consultant and Manager of Compliance 

With the change in management of the CFPB, we are seeing changes in how they operate. When they published their Regulatory Agenda for Fall 2017 (late as usual – it appeared in January 2018), they restated what Section 1021 of the Dodd-Frank Act specified as the objectives of the Bureau, including:

  • Providing consumers with timely and understandable information to make responsible decisions about financial transactions
  • Protecting consumers from unfair, deceptive, or abusive acts and practices and from discrimination
  • Addressing outdated, unnecessary, or unduly burdensome regulations
  • Enforcing federal consumer financial law consistently in order to promote fair competition, without regard to the status of a covered person as a depository institution
  • Promoting the transparent and efficient operation of markets for consumer financial products and services to facilitate access and innovation

They stated that their work in pursuit of those objectives can be grouped into three main categories:

  1. Implementating statutory directives
  2. Other efforts to address market failures, facilitate fair competition among financial services providers, and improve consumer understanding
  3. Modernizing, clarifying, and streamlining consumer financial regulations to reduce unwarranted regulatory burdens

Implementing Statutory Directives

In this area, the CFPB is continuing efforts to facilitate implementation of critical consumer protections under the Dodd-Frank Act. They listed three efforts under way. They include:

  • Regulation C (Home Mortgage Disclosure Act)
  • Mortgage servicing changes
  • Continuing to improve the TRID portion of Regulation Z

The CFPB also listed other projects that are “in the works,” but probably nowhere near completion.

Other Efforts To Address Market Failures, Facilitate Fair Competition among Financial Services Providers, and Improve Consumer Understanding

In this area, the CFPB said they were considering rules, such as:

  • Payday loans, auto title loans, and other similar credit products
  • Debt collection
  • Overdraft programs on checking accounts
  • Prepaid financial products
  • Modernizing, streamlining, and clarifying consumer financial regulations

Many of the regulations are approaching 50 years old and are out of date with the current world. For instance, Regulation B allows you to turn down a customer for not having a land line phone in the home. That was fine in the 1970s, but probably not relevant now. Updating this and many other regulations is overdue, including looking at the effectiveness of some of the more recent changes, which they say they will be doing.

Conclusion

We will have to wait and see what happens. As with all bureaucracies, and based on their past performance, changes are likely to appear slowly. In general, it appears that “new regulations” may slow down a bit, giving us in the industry a chance to catch up.

Young & Associates, Inc. offers a wide variety of compliance services to help your bank satisfy these compliance requirements. If we can help you “catch up” or improve your response to any of the regulations, we stand ready to assist. Please contact Karen Clower, Compliance Operations Manager, at kclower@younginc.com or 330.422.3444 and she will be happy to discuss our services with you.