Seven policy statements issued from late March to early June 2020 that provided temporary flexibilities to financial institutions in the areas of consumer mortgages, credit reporting, credit cards, and prepaid cards are rescinded as of April 1 (Thursday), the Consumer Financial Protection Bureau (CFPB) announced Wednesday.
The bureau also said it was rescinding its 2018 bulletin on supervisory communications and replacing it with a revised one describing its use of matters requiring attention (MRAs) “to effectively convey supervisory expectations.” That new bulletin, 2021-01, states that “effective immediately,” the bureau will no longer use “supervisory recommendations” in these communications.
“We are now over a year into the disruptive and deadly COVID-19 crisis. 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,” said CFPB Acting Director Dave Uejio. “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The rescinded policy statements were issued between March 26 through June 3, 2020, and temporarily provided financial institutions with flexibilities regarding certain regulatory filings or compliance with consumer financial laws and regulations. The bureau said the rescissions “reflect the Bureau’s commitment to consumer protection, and the fact that financial institutions have had a year to adapt their operations to the difficulties posed by the pandemic.”
The bureau, in its release, included links to each policy statement rescission notice and the new MRA bulletin:
- Rescission of Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic (March 26, 2020): The 2020 statement provided that the CFPB would take into account staffing and related resource challenges confronting financial institutions and their counsel as they relate to supervisory activities and enforcement actions; and that when conducting examinations and other supervisory activities and in determining whether to take enforcement action, the bureau will consider the circumstances that entities may face as a result of the pandemic “and will be sensitive to good-faith efforts demonstrably designed to assist consumers.” The CFPB said this rescission also withdraws the CFPB as a signatory to the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (April 7, 2020) and the Interagency Statement on Appraisals and Evaluations for Real Estate Related Financial Transactions Affected by the Coronavirus (April 14, 2020).
- Rescission of Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act (March 26, 2020): This statement provided that until further notice, the bureau did not intend to cite in an examination or initiate an enforcement action against any institution for failure to report its HMDA data quarterly, as required under RegulationC. This rescission also instructs all financial institutions 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 taken date between January 1 and March 31, 2021.
- Rescission of Statement on Supervisory and Enforcement Practices Regarding CFPB Information Collections for Credit Card and Prepaid Account Issuers (March 26, 2020): This 2020 policy statement provided that the bureau, until further notice, did not intend to cite in an examination or initiate an enforcement action against any entity for failure to submit to the bureau certain information collections relating to credit card and prepaid accounts required by TILA, Regulation Z, and Regulation E. The rescission also provides guidance as to how entities should now meet the specified information collections requirements relating to credit card and prepaid accounts.
- Rescission of Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act (FCRA) and Regulation V in Light of the CARES Act (April 1, 2020): This 2020 statement highlighted consumer report information furnishers’ responsibilities under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and noted the bureau’s flexible supervisory and enforcement approach during the COVID-19 pandemic regarding FCRA/Reg V compliance. The rescission leaves intact the section entitled “Furnishing Consumer Information Impacted by COVID-19,” which articulates the CFPB’s support for furnishers’ voluntary efforts to provide payment relief and that 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.
- Rescission of Statement on Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J (April 27, 2020): Generally, this policy statement provided that the bureau, until further notice, did not intend to take supervisory or enforcement action against land developers subject to ILSA and Regulation J for delays in filing annual reports of activity and in filing financial statements with the bureau, provided that developers were making good faith efforts to file within a reasonable time. The rescission instructs land developers subject to ILSA and Regulation J to resume filing of annual reports of activity and financial statements as specified in Regulation J.
- Rescission of Statement on Supervisory and Enforcement Practices Regarding Regulation Z Billing Error Resolution Timeframes in Light of the COVID-19 Pandemic (May 13, 2020): This policy statement from 2020 provided that when evaluating a creditor’s compliance with the maximum timeframe for billing error resolution set forth in Regulation Z, the bureau intended to consider the creditor’s circumstances and did not intend to cite a violation in an examination or bring an enforcement action against a creditor that takes longer than required by the regulation to resolve a billing error notice, providing good-faith efforts to arrive at a timely determination and compliance with other requirements.
- Rescission of Statement on Supervisory and Enforcement Practices Regarding Electronic Credit Card Disclosures in Light of the COVID-19 Pandemic(June 3, 2020): This statement provided that under specified circumstances, the CFPB did not intend to cite a violation in an examination or bring an enforcement action against an issuer that during a phone call did not obtain a consumer’s E-Sign consent to electronic provision of certain written disclosures required by Regulation Z as long as the issuer, during the call, obtained both the consumer’s oral consent to electronic delivery of the written disclosures and oral affirmation of his or her ability to access and review them.
- Rescission of Bulletin 2018-01, with new Bulletin 2021-01 on “Changes to Types of Supervisory Communications”: The rescinded bulletin (available here) is replaced by Bulletin 2021-01 announcing changes to how CFPB examiners articulate supervisory expectations. The new bulletin states that the CFPB will continue to rely on MRAs, explains the circumstances under which it will do so, and announces that the CFPB will discontinue use of Supervisory Recommendations.