Bureau moves ‘overdraft protection’ rules to inactive list of regulatory action

In 'expectation' permanent director will take action (or not)

Six regulatory actions – including those proposed on “overdraft services” – have been moved to the “inactive list” the Bureau of Consumer Financial Protection (BCFP) notes in its spring 2018 rulemaking agenda released Thursday.

“The Bureau’s Acting Director (Mick Mulvaney) has decided to reclassify as ‘inactive’ certain other rulemakings that had been listed in previous editions of our Unified Agenda in the expectation that final decisions on whether and when to proceed with such projects will be made by the Bureau’s next permanent director,” the agenda states, published as a blog post. “This change in designation is not intended to signal a substantive decision on the merits of the projects.”

The other five items on the “inactive” list include: Alternative Mortgage Transaction Parity (Regulation D); Supervision of Larger Participants in Markets for Personal Loans; Consumer Financial Civil Penalty Fund; Defining Larger Participants in Certain Consumer Financial Product and Service Markets; and Student Loan Servicing.

The “overdraft services” proposed rulemaking has been especially controversial among financial institutions and other regulated organizations. In January, when the bureau published its 2018 rulemaking agenda (developed before the leadership change at the agency in November, when Mulvaney was named acting director) the bureau reported it was preparing for a “potential rulemaking” regarding the overdraft programs on checking accounts, citing several years of research leading it to believe that “there are consumer protection concerns with regard to these programs.” The agency asserted, then, that the market for the programs does not appear to be competitive and that consumers “do not shop based on overdraft fee amounts and policies.”

However, last month in questions and answers following testimony before the House Financial Services Committee, Mulvaney said overdraft rules would not be on the bureau’s spring rulemaking agenda after all. Mulvaney’s comment about the overdraft rules was in response to a question from Rep. Bruce Poliquin, R-Maine.

The bureau’s 2018 spring rulemaking also notes:

  • The agency is preparing a proposed rule focused on Fair Debt Collection Practices Act (FDCPA) collectors that may address such issues as communication practices and consumer disclosures. “The Bureau has engaged in research and pre-rulemaking activities regarding the debt collection market, which continues to be a top source of complaints to the Bureau,” it states.
  • On its long-term list of actions (beyond 12 months), it includes: Consumer access to financial records; consumer reporting; Regulation E modernization; and amendments to FIRREA concerning appraisals (automated valuation models).

Spring 2018 rulemaking agenda