On Oct. 17, the Consumer Financial Protection Bureau (CFPB or Bureau) released its 2018 Fall Rulemaking Agenda; its second agenda under Acting Director Mick Mulvaney’s leadership. The 2018 Agenda identifies regulatory matters that the CFPB “reasonably anticipates” considering during the period from October 1, 2018, to September 30, 2019.
When coupled with other recent CFPB announcements, the 2018 agenda provides insight on the Bureau’s regulatory priorities for the mortgage industry over the coming year. Here are some of the highlights.
The CFPB is considering rulemaking to clarify the meaning of abusive under its Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) authority, which former Director Richard Cordray liberally used to prosecute cases. In remarks to the Mortgage Bankers Association in October, Acting CFPB Director Mark Mulvaney said that actions that constitute unfair and deceptive are well-established in the law, but that the term abusive is not.
The Dodd Frank Act required the CFPB to assess the effectiveness of each “significant” federal consumer financial protection law within five years of its effective date, after receiving public comment. The final QM rule was issued on January 10, 2014, and the CFPB says in its 2018 Agenda preamble that it plans to complete its assessment of this rule by January 2019.
Moreover, the CFPB asked in March 2018 for public comment on “Adopted Regulations” it previously issued under the authority of the Dodd Frank Act, which include the QM rule. The comments it received, together with the comments it received in response to its 2017 solicitation of comments on the QM rule, have built a foundation on which to recommend changes to the rule when the Bureau’s five-year assessment is complete.
There have been several signals pointing to possible future changes to the Truth-in Lending Act (TILA)-RESPA Integrated Disclosure rule (TRID). First, the CFPB stated in the 2018 Agenda preamble that it expects to begin work in 2019 on its five-year assessment of TRID, which is a “significant” rule that became effective on October 20, 2015.
Second, the 2018 Economic Growth, Regulatory Relief, and Consumer Protection contained a “Sense of Congress” provision that urged the CFPB to provide clearer, authoritative guidance on certain issues in connection with the TRID regulation.
Finally, TRID is an “Adopted Regulation” that amended an “Inherited Regulation”, both of which were the focus of the 2018 CFPB Requests for Information to help it decide whether to amend rules that fall within either of these two categories.
The CFPB expects to issue final guidance in late 2018 on how its 2015 standards governing consumer privacy of HMDA data should be applied to 2018 HMDA data. It also will publish a Notice of Proposed Rulemaking with a public comment period in the spring of 2019 to govern the disclosure of HMDA data in future years.
The Bureau announced in May 2018 that it was “reexamining the requirements of the Equal Credit Opportunity Act (ECOA) in light of recent Supreme Court case law,” and also listed this project as a potential future activity in the 2018 Agenda’s preamble.
The referenced Supreme Court case is Texas Department of Housing & Community Affairs vs. The Inclusive Communities Project, Inc., in which the Court held that disparate impact claims may be brought under the Fair Housing Act but set standards to ensure that racial imbalance alone does not create a prima facie case. The Supreme Court has never ruled on whether a claim based on disparate impact is valid under the ECOA, and Cordray brought numerous ECOA enforcement actions under the doctrine.
The CFPB launched a “Calls for Evidence” earlier this year that sought public feedback on its enforcement processes, supervision program, civil investigative demands (CIDs), and rules of practice for adjudication proceedings. It says in the 2018 Agenda preamble that it is analyzing the 86,000 comments it received and will take them into account in future rulemaking agendas.
The CFPB says it expects to issue a more comprehensive statement of priorities in its 2019 Spring Regulatory Agenda. Taken in their entirety, all signs appear to point to robust regulatory activity in 2019 that sets the stage for rulemakings in 2020 and beyond under Mulvaney’s successor.
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