CFPB reverses pandemic flexibilities, promising application

The Consumer Financial Protection Bureau on Wednesday announced it was rolling back seven of its temporary policies put in place to protect consumers during the pandemic. The seven cancellations will take effect on Thursday, April 1, with the government agency noting that it intends to exercise the full extent of its oversight and enforcement authority under the Dodd-Frank Act.

In one of its key decisions, the CFPB said it would overturn its leniency on Home Mortgage Disclosure Act data reporting. In March 2020, the CFPB announced that it would no longer require certain lenders to report quarterly information under the HMDA.

The CFPB also said it was withdrawing its signature from several statements that allowed lenders to work with consumers affected by the pandemic.

In his withdrawal from the Office Oversight and Enforcement Statement In response to the COVID-19 pandemic, the CFPB said: “It believes that businesses should have had sufficient time to adapt to the pandemic and should now be able to adequately comply with the law. and respond to enforcement actions or surveillance activities without the flexibility afforded by reporting. “

The CFPB also withdrew its signature from an interagency statement that authorized leniency on loan modifications and the reporting for financial institutions which was signed by the agency in April 2020, alongside the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Administration of Credit Unions and the Office of the Comptroller of the Currency.

How repairers can stay ahead of potential Biden regulatory changes

Among the unknowns repairers face in 2021 are changes that could affect Lender Placed Insurance (LPI). Service agents should have the flexibility to keep up with the latest changes in order to remain compliant and efficient while providing the best experience for borrowers.

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The statement provided clarification on the discrepancies for certain standards under Section 4013 of the CARES Act (titled Temporary Relief from Distressed Debt Restructuring).

The aforementioned agencies also signed a declaration describing flexibilities on industry assessment standards and then discussed the valuation regulations for Fannie and Freddie a week later. The CFPB said it would also withdraw its signature from this letter. The flexible standards allowed for more appraisal options on some qualifying primary residence loans, including office appraisals and outside appraisals only.

“As consumers seek temporary relief from lenders, the pandemic is impacting the operations of financial companies who are keen to help their customers during this unprecedented time,” said former CFPB director Kathleen Kraninger , at the time that several of these policies were published. “Our actions today are temporary and targeted to support consumers by allowing financial companies to focus their resources on assisting consumers.”

The CFPB has also rescinded leniency on disclosure of certain information relating to credit cards and prepaid accounts under the Truth in Lending Act, Regulation Z, and Regulation E. This includes annual submissions regarding agreements. between credit card issuers and higher education institutions; quarterly submission of consumer credit card contracts; collecting certain information on the price and availability of credit cards; and the submission of prepaid account agreements and related information.

The bureau will also enforce the Fair Credit Reporting Act and Regulation V, which protects consumer privacy, after saying it intends to cancel flexibilities granted to companies that report credit data. The information in these consumer reports is used to make many types of decisions, including whether a consumer can borrow money or how much interest they will pay in interest to finance a home or a major purchase. How this will affect the reporting of delinquent loans has not yet been defined.

The CFPB also now intends to take enforcement action against real estate developers subject to the Interstate Land Sales Full Disclosure Act under Regulation J. Originally, flexibilities allowed for delays in filing annual reports. activity with the aim of “reducing the administrative burden”. However, the office will not take any surveillance action against those who did not file a case between April 27, 2020 and April 30, 2021.

Its last two cancellations included enforcement flexibilities on Regulation Z billing error times and electronic credit card disclosures.

“Providing regulatory flexibility to businesses should not come at the expense of consumers. As many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The first priority of CFPB, today and always, is to protect consumers from damage, ”said Dave Uejio, Acting Director of CFPB.

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