CFPB Puts Inherited Consumer Financial Protection Regulations on the Table
By: David A. Tallman
Adding to its already full plate, the Bureau of Consumer Financial Protection (the “CFPB” or the “Bureau”) recently requested public comment on its review of the various consumer financial protection regulations it has inherited from other agencies. The request signals that the Bureau does not intend for its higher-profile mortgage finance initiatives to overshadow its mandate to update, modify (or even eliminate) outdated, unduly burdensome, or unnecessary existing regulations. It also suggests that the CFPB is contemplating that its initial review of the inherited regulations may extend beyond mere technical corrections to more significant substantive changes.
The CFPB highlighted several specific possibilities out of the practically unlimited opportunities to “streamline” the inherited regulations. For instance, the Bureau requested comment on whether it should carve out an exception to the requirement to deliver annual privacy notices in the regulations implementing the Gramm-Leach-Bliley Act (the “GLBA”) when a financial institution’s privacy practices have not changed and the institution shares non-public personal information only in narrow circumstances. The Bureau thus appears receptive to making substantive changes to the GLBA privacy regulations as part of its initial review of the inherited regulations. Financial institutions may want to take this opportunity to bring other burdensome or unclear aspects of the privacy regulations to the Bureau’s attention. The privacy regulations, for example, place initial and annual notice requirements on a financial institution that owns master servicing rights, regardless of whether the consumer actually interacts with that institution. Mortgage servicers may want to request clarification on the extent to which a subservicer can or should deliver its own privacy notice to consumers.
Other specific matters on which the CFPB requested comment include: (a) the harmonization of definitions across the inherited regulations; (b) the necessity of the Regulation E ATM signage requirements; (c) the creation of a low-volume exemption from HMDA reporting requirements for depository institutions; (d) the harmonization of data collection exemptions in Regulation B and Regulation C; (e) the creation of a low-volume exemption from the Regulation B requirement to timely notify credit applicants of action taken; (f) when a person “regularly” extends credit for purposes of Regulation Z; (g) the necessity of the Regulation Z requirement to assess credit card applicants’ repayment ability; (h) the delivery of disclosures by text messaging and other electronic means; and (i) amendments to the regulations implementing the Interstate Land Sales Full Disclosure Act.
Comments must be submitted to the Bureau no later than 90 days after the request is published in the Federal Register. Please let us know if you would like assistance in preparing comments.