The Consumer Financial Protection Bureau (CFPB) announced it is rescinding seven policy statements issued at the onset of the COVID-19 pandemic.
These statements, issued between March 26, 2020, and June 3, 2020, provided flexibilities for regulatory filing or compliance with consumer financial laws to financial institutions in consumer financial markets including mortgages, credit reporting, credit cards, and prepaid cards. The bureau also rescinded a matters requiring attention (MRA) bulletin it issued in 2018.
“We are now over a year into the disruptive and deadly COVID-19 crisis,” CFPB acting Director Dave Uejio said in a release. “The virus has affected industry as well as consumers, but individuals and families have been hardest-hit by the pandemic’s health and economic impacts.”
Specifically, the rescinded policies are statements on bureau supervisory and enforcement responses and practices regarding:
- The COVID-19 pandemic. Additionally, this withdraws the CFPB from the interagency statements on loan modifications and reporting for financial institutions working with customers affected by the coronavirus and on appraisals and evaluations for real estate related financial transactions affected by the coronavirus.
- The quarterly reporting under the Home Mortgage Disclosure Act. This recission instructs all financial institutions that are required to file quarterly to do so beginning with their 2021 first quarter data, due on or before May 31, 2021, for all covered loans and applications with a final action date taken between Jan. 1 and March 31 of this year.
- The bureau’s information collections for credit card and prepaid account issuers. Guidance is also provided as to how entities should now meet the specified information collections requirements relating to credit card and prepaid accounts.
- The Fair Credit Reporting Act and Regulation V in light of the CARES Act. The section entitled “Furnishing Consumer Information Impacted by COVID-19” was left intact by the recission. This outlines CFPB’s support for furnishers’ voluntary efforts to provide payment relief. It also states the bureau does not intend to cite in examinations or take enforcement actions against those who furnish information to consumer reporting agencies that accurately reflect the payment relief measures they are employing.
- The certain filing requirements under the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J. In this recission, land developers subject to ILSA and Regulation J are instructed to resume the filing of annual reports of activity and financial statements as specified.
- The Regulation Z billing error resolution timeframes in light of the COVID-19 pandemic.
- The electronic credit card disclosures in light of the COVID-19 pandemic.
- Bulletin 2018-01: Changes to types of supervisory communications.
“Providing regulatory flexibility to companies should not come at the expense of consumers,” Uejio said. “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 2018 bulletin has been replaced by Bulletin 2021-01, which announces changes to how the bureau’s examiners articulate supervisory expectations. The new bulletin states the bureau will continue to rely on MRAs, and also explains the circumstances under which it will do so. The CFPB also announced it will discontinue the use of supervisory recommendations.
The Consumer Bankers Association President and CEO Richard Hunt disagreed with the bureau’s decision to rescind these policies.
“This announcement ignores the reality facing banks across the country,” Hunt said. “Hundreds of thousands of bankers continue to work from home and need the flexibility to protect customers remotely. While our institutions continue to comply with the law, revoking this flexibility in the final stages of this pandemic is not the answer. The bureau should be looking for ways to ensure banks can better serve consumers and small businesses as we all work towards the other side of this public health crisis – not hamstring them with 24-hour notices.”
The recissions became effective April 1, 2021.