Signs of Change at the CFPB

On January 16 and 17, 2018, the Consumer Financial Protection Bureau (CFPB) released two statements signaling that yet more change is on the horizon for the agency.  Close on the heels of similar announcements regarding potential changes to its Home Mortgage Disclosure Act and prepaid card rules, the Bureau announced on January 16 that it will open a rulemaking process to reconsider its Payday Lending Rule.  The next day, CFPB Acting Director Mulvaney announced that the Bureau will begin publishing a series of Requests for Information in the Federal Register soliciting feedback on a number of its functions.

Developed over an extended period of time under former-Director Cordray, the Payday Lending Rule (announced in October 2017) imposed numerous requirements on payday lenders including requiring them to consider a borrower’s ability to repay before providing a loan.  (We covered the rule in detail here.)  Although the Bureau’s January 16 announcement makes clear that it intends to revisit the rule before the vast majority of its provisions become effective in August 2019, it did not specify whether it is reconsidering individual components of the rule or the rule as a whole.  The announcement does, however, inform potentially affected industry members that the Bureau can issue waivers regarding one provision of the rule–the requirement to apply for preliminary approval to become a registered information system–which becomes effective April 16, 2018.

But change at the CFPB may be even more fundamental.  The Bureau’s January 17 announcement of a series of requests for information about the agency’s functions suggests significant changes may be coming.  The announcement mentions that the CFPB will seek comment regarding “enforcement, supervision, rulemaking, market monitoring, and education activities.”  Although the CFPB did not set a specific date, it announced that these solicitation requests will be published within the next few weeks.  Significantly, it announced that the first request for information will focus on one of the Bureau’s most powerful tools—Civil Investigative Demands.

Industry participants should monitor these developments closely, and consider whether comment on any particular proposed rule change or request for information might be appropriate.

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