The Consumer Financial Protection Bureau (CFPB) recently celebrated its second birthday by highlighting some of its accomplishments during its short two-year tenure.
Among them were laudable milestones in the pursuit of consumer protection, including collecting 175,000 complaints and returning $430 million in restitution to aggrieved consumers of financial products.
But suspiciously absent from the birthday celebration announcement was any mention of the agency’s principal accomplishment over the past two years: issuing a record volume of regulations.
There are no signs the CFPB will take a break to eat birthday cake. Instead, a close look at the agency’s recently released semiannual regulatory agenda indicates it is moving full speed ahead on additional regulatory rule making.
Highlights from the CFPB’s agenda provide a few predictions of what compliance officers can expect to hit their desks over the next six months. Let’s take a look.
Mortgage rule onslaught will continue
By now, all credit unions offering mortgages should be aware of the six final mortgage rules the agency issued January. While the task of mastering 3,500 pages of new regulations is daunting, it’s complicated by the CFPB’s decision to issue additional proposed tweaks to the rules throughout the year.
So far, the CFPB has issued two sets of clarifications on the implementation of the rules, including adding clarity to the possible double counting of mortgage originator compensation, implementation dates for mortgage servicing requirements, and extending the deadline on the prohibition on financing credit insurance premiums for some mortgage products.
While these clarifications are often helpful, and indicate the agency’s willingness to be responsive to comments from the financial industry, the constant addition of proposed regulations creates a moving target and an unsustainable reading list for credit union compliance officers.
For better or worse, the CFPB has indicated that modifications to the mortgage rules will continue on a rolling basis up until the implementation date for the rules in January of 2014.
In addition to the six rules issued in January, the CFPB has indicted it will press forward with issuing the seventh mortgage rule in October. The final rule will create a combined disclosure under Regulations Z and X.
While the rules already finalized focus on the policies and procedures of underwriting and servicing, the combined disclosure rule will completely revamp the disclosure requirements connected to the loan event—making the end of 2013 a busy time for mortgage lenders.
The CFPB indicated it will finalize revisions to Reg CC, first proposed by the Federal Reserve, by the end of the year.
The purpose of the new rules will be to update the Expedited Funds Availability Act for the transition to an all-electronic interbank check collection and return process.
While the practical impact to credit union members may be minimal, compliance officers likely will have to learn new time periods for funds availability and new model form disclosures.
Fair lending a focal point
While the clear focus of the CFPB over 2013 has been the overhauling of the entire mortgage market, it has clear ambitions to expand its regulatory focus.
The agency’s regulatory agenda unmistakably signals that fair lending will be a focal point of new rule making starting in 2014.
The start of this effort will be a hard look at the data gathering requirements under the Home Mortgage Disclosure Act and will later expand into possible rules mandating the collection of credit application data for credit unions involved with business lending.
The CFPB’s regulatory agenda sets the expectation that the furious pace of regulatory change will continue for the coming year. Those of you who were hoping for a reprieve will instead have to keep up with the precocious two-year-old agency.