Consumer Financial Protection Bureau Rescinds COVID-Related Relief
Recently, the Consumer Financial Protection Bureau (CFPB) rescinded seven policy statements issued during 2020 that provided temporary relief for financial institutions in consumer financial markets including mortgages, credit reporting, credit cards and prepaid cards. When announcing the rescissions, Dave Uejio, Acting Director of the CFPB, put financial institutions on notice that the CFPB intends to exercise the full scope of its supervisory and enforcement authority under the Dodd-Frank Act:
“Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”
The rescinded policy statements include:
- Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic: This statement affirmed that the CFPB would take into account staffing and related resource challenges facing banks when conducing supervision and enforcement activities.
- Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act: This statement postponed quarterly Home Mortgage Disclosure Act (HMDA) reporting requirements.
- Statement on Supervisory and Enforcement Practices Regarding Bureau Information Collections for Credit Card and Prepaid Account Issuers: This statement postponed data submission requirements related to credit card and prepaid accounts required under the Truth in Lending Act (TILA), Regulation Z and Regulation E.
- Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act: This statement addressed financial institutions’ reporting obligations under the Fair Credit Reporting Act (FCRA) and Regulation V during the pandemic.
- Statement on Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act and Regulation J: This statement affirmed that the CFPB would not take supervisory or enforcement action in connection to certain annual reports of activity and financial statements by land developers subject to the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J until further notice.
- Statement on Supervisory and Enforcement Practices Regarding Regulation Z Billing Error Resolution Timeframes in Light of the COVID-19 Pandemic: This statement provided flexibility for creditors to resolve billing errors during the pandemic.
- Statement on Supervisory and Enforcement Practices Regarding Electronic Credit Card Disclosures in Light of the COVID-19 Pandemic: This statement relaxed electronic consent requirements when issuers provided electronic versions of disclosures that are required from a consumer in accordance with the E-Sign Act and Regulation Z.
The rescissions took effect on April 1.
The CFPB also rescinded its 2018 bulletin on supervisory communications and replaced it with a revised bulletin regarding Changes to Types of Supervisory Communications that described its use of Matters Requiring Attention (MRAs) to effectively convey supervisory expectations. The revised bulletin notes that “examiners will continue to rely on Matters Requiring Attention to convey supervisory expectations” and will no longer issue Supervisory Recommendations. It further stated that “bureau examiners may issue MRAs with or without a related supervisory finding that a supervised entity has violated a Federal consumer financial law.”