The consumer financial protection agency’s desire to transition away from highly complicated rules and toward simpler, clearer rules – plus a look at its current regulatory priorities – was detailed in a blog post Friday by the agency’s director.
Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, in the blog post, said the agency wants to more clearly communicate its expectations, noting that unnecessarily complex guidance and rules impede consumer protection but increase compliance costs in a way that benefits larger market players and their “high-priced lawyers.”
Chopra touted the benefits of “bright-lines” in regulation, which he said help to promote understanding and to prevent “strategic or intentional ‘misunderstanding’ or plausible deniability that some companies use to ignore the law.” He added that clarity and simplicity “will promote consistency among government agencies responsible for enforcement of federal consumer financial law.”
As for the agency’s current regulatory priorities, Chopra said the bureau is heavily focused on implementing rulemakings on consumer access to their financial records, small-business lending data collection, quality control standards for automated valuation models used for real estate valuations, and rules on Property Assessed Clean Energy (PACE) financing. (Information at reginfo.gov, which houses regulatory plans across federal agencies as of fall 2021, shows consumer records and PACE financing have so far been addressed in advance notices of proposed rulemaking; small-business loan data has been the subject of a proposed rule; and AVM standards are slated for a proposed rule this month.)
Chopra added that the bureau is reviewing other authorities the agency has to yet exercised. “For example, we are assessing whether to utilize Congressional authority to register certain nonbank financial companies to identify potential scammers and others that repeatedly violate the law,” he said.
The agency is also, he said, reviewing some longstanding rules that the bureau inherited from other agencies, including the Federal Reserve Board and Federal Trade Commission (FTC). Among them:
- Rules originally developed by the Fed Board under the Credit CARD Act of 2009, including the enforcement immunity and inflation provisions when imposing penalties on customers.
- Rules originally developed by the FTC to implement the Fair Credit Reporting Act (FCRA), in an effort to identify potential enhancements and changes in business practices.
- The CFPB’s qualified mortgage (QM) rules, to explore ways to spur streamlined modification and refinancing in the mortgage market, as well as assessing aspects of the “seasoning” provisions.