NASCUS Member Benefit: Recent CFPB Resource Summaries
CFPB Consumer Financial Protection Circular 2022-07: Reasonable Investigation of Consumer Reporting Disputes
12 CFR Chapter X
The Consumer Financial Protection Bureau (CFPB) issued this circular to respond to two questions regarding the responsibilities of consumer reporting agencies.
- Are consumer reporting agencies and the entities that furnish information to them (furnishers) permitted under the Fair Credit Reporting Act (FCRA) to impose obstacles that deter the submission of disputes?
- Do consumer reporting agencies need to forward to furnishers consumer-provided documents attached to a dispute?
The Bureau released this circular on its website on November 10, 2022, and the circular can be accessed here.
CFPB Consumer Financial Protection Circular 2022-06: Unanticipated Overdraft Fee Assessment Practices
12 CFR Chapter X
The Consumer Financial Protection Bureau (CFPB) has issued Consumer Financial Protection Circular 2022-06, titled “Unanticipated Overdraft Fee Assessment Practices” to respond to a question posed about whether the assessment of overdraft fees under certain instances would be considered an unfair act or practice under the Consumer Financial Protection Act (CFPA), even if the entity complies with the Truth in Lending Act (TILA) and Regulation Z and the Electronic Fund Transfer Act (EFTA) and Regulation E.
The circular became effective on October 26, 2022 and can be found here.
Notice of Intent to Make a Preemption Determination
The CFPB issued a Notice of Intent to Make a Preemption Determination under TILA. In the Notice, the Bureau explains it has preliminarily determined that TILA does not preempt a New York State law governing commercial financing with respect to certain provisions. Additionally, the Bureau is providing notice that it is considering whether to make a preemption determination regarding State laws in California, Utah, and Virginia that are potentially similar to the New York law.
The Bureau is soliciting public comment on this preliminary preemption determination.
You can access the Notice here: www.consumerfinance.gov/rules-policy/notice-opportunities-comment/open-notices/notice-of-intent-to-make-preemption-determination-under-truth-in-lending-act/.
Blog: Update on state laws on lending to businesses
The CFPB received a request from an industry trade association to determine whether New York’s commercial financing disclosure law is preempted by the federal Truth in Lending Act. Congress has expressly authorized the CFPB to determine whether state laws are preempted by the Truth in Lending Act. The public can request such a determination, or the CFPB can raise the issue on its own. The Truth in Lending Act’s implementing regulations require the CFPB to request public comment before determining whether a state law is preempted.
After carefully considering the request, the CFPB’s preliminary determination is that the New York law is not preempted by the Truth in Lending Act because the New York law regulates commercial financing transactions rather than consumer-purpose transactions. The CFPB is requesting comment on whether it should finalize its preliminary determination that the New York law – as well as potentially similar laws in California, Utah, and Virginia – are not preempted.
Blog: Changes to HMDA’s closed-end loan reporting threshold
On September 23, 2022, the United States District Court for the District of Columbia issued an order vacating the 2020 Home Mortgage Disclosure Act (HMDA) Final Rule as to the loan volume reporting threshold for closed-end mortgage loans. The decision means that the threshold for reporting data on closed-end mortgage loans is now 25 loans in each of the two preceding calendar years, which is the threshold established by the 2015 HMDA Final Rule, rather than the 100 loan threshold set by the 2020 HMDA Final Rule.
The CFPB recognizes that financial institutions affected by this change may need time to implement or adjust policies, procedures, systems, and operations to come into compliance with their reporting obligations. In these limited circumstances, in allocating the CFPB’s enforcement and supervisory resources, the CFPB does not view action regarding these institutions’ HMDA data as a priority. Thus, the CFPB does not intend to initiate enforcement actions or cite HMDA violations for failures to report closed-end mortgage loan data collected in 2022, 2021, or 2020 for institutions subject to the CFPB’s enforcement or supervisory jurisdiction that meet Regulation C’s other coverage requirements and originated at least 25 closed-end mortgage loans in each of the two preceding calendar years but fewer than 100 closed-end mortgage loans in either or both of the two preceding calendar years.
Agency: National Credit Union Administration
Final Rule Summary: Asset Threshold for Determining the Appropriate Supervisory Office; Office of National Examinations and Supervision (ONES)
The NCUA Board is amending its regulations to revise the $10 billion asset threshold used for assigning supervision of consumer federally insured credit unions (FICUs) to the Office of National Examinations and Supervision (ONES). The rule does not alter any regulatory requirements for covered credit unions. The rule only applies to FICUs whose assets are $10 billion or more. The rule provides that covered credit unions with less than $15 billion in total assets, referred to as Tier I credit unions, will be supervised by the appropriate NCUA Regional Office. Credit unions with $15 billion or more in total assets, considered Tier II and Tier III, will continue to be supervised by ONES.
The final rule is effective January 1, 2023, and can be found in its entirety here.
Click here to read the full NASCUS Summary (Member login required.)
Agency: Consumer Financial Protection Bureau
Fair Credit Reporting: Permissible Purposes for Furnishing, Using, and Obtaining Consumer Reports
12 CFR Part 1022
The Consumer Financial Protection Bureau (CFPB) is issuing this advisory opinion to outline certain obligations of consumer reporting agencies and consumer report users under Section 604 of the Fair Credit Reporting Act (FCRA). The opinion explains that the permissible purposes listed in FCRA Section 604(a)(3) are consumer specific, and it affirms that a consumer reporting agency may not provide a consumer report to a user under FCRA Section 604(a)(3) unless it has reason to believe that all of the consumer report information it includes pertains to the consumer who is the subject of the user’s request. The Bureau notes that disclaimers will not cure a failure to have a reason to believe that a user has a permissible purpose for a consumer report provided pursuant to FCRA Section 604(a)(3). The advisory opinion also reminds consumer report users that FCRA Section 604(f) strictly prohibits a person who uses or obtains a consumer report from doing so without a permissible purpose.
The advisory opinion became effective on July 12, 2022 and can be found here.
Click here to read the full NASCUS Summary (Member login required.)
Financial Crimes Enforcement Network (FinCEN), Treasury
ACTION: Advance notice of proposed rulemaking. No-Action Letter Process
TOPIC: FinCEN is issuing this advance notice of proposed rulemaking (ANPRM) to solicit public comment on questions relating to the implementation of a no-action letter process at FinCEN. Given that the addition of a no-action letter process at FinCEN may affect or overlap with other forms of regulatory guidance and relief that FinCEN already offers, including administrative rulings and exceptive or exemptive relief, this ANPRM, among other things, seeks public input on whether a no-action letter process should be implemented and, if so, how the no-action letter process should interact with those other forms of relief.
DATES: Comments must be received by August 5, 2022.
Click here to read the full NASCUS Summary (Member login required.)
BUREAU OF CONSUMER FINANCIAL PROTECTION ( 12 CFR Part 1006) Debt Collection Practices (Regulation F); Pay-to-Pay Fees
ACTION: Advisory opinion
TOPIC: Section 808(1) of the Fair Debt Collection Practices Act (FDCPA or Act) prohibits debt collectors from collecting any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless that amount is expressly authorized by the agreement creating
the debt or permitted by law. The Consumer Financial Protection Bureau (CFPB) issues this advisory opinion to affirm that this provision prohibits debt collectors from collecting pay-to-pay or ‘‘convenience’’ fees, such as fees imposed for making a payment online or by phone, when those fees are not expressly authorized by the agreement creating the debt or expressly authorized by law. This advisory opinion also clarifies that a debt collector may also violate section 808(1) when the debt collector collects pay-topay fees through a third-party payment processor.
DATES: This advisory opinion is effective on July 5, 2022.
Click here to read the full NASCUS Summary (Member login required.)
BUREAU OF CONSUMER FINANCIAL PROTECTION
ACTION: Request for Information Regarding Employer-Driven Debt
TOPIC: The Consumer Financial Protection Bureau (CFPB or Bureau) is charged with monitoring markets for consumer financial products and services to ensure that they are fair, transparent, and competitive. As part of this mandate, the CFPB is seeking input from the public on debt obligations incurred by consumers in the context of an employment or independent contractor arrangement. Areas of inquiry include prevalence, pricing and other terms of the obligations, disclosures, dispute resolution, and the servicing and collection of these debts.
DATES: Comments must be received by September 7, 2022.
Click here to read the full NASCUS Summary (Member login required.)
BUREAU OF CONSUMER FINANCIAL PROTECTION
ACTION: Advance notice of proposed rulemaking. Credit Card Late Fees and Late Payments
TOPIC: In order to support its rulemaking and other functions, the Consumer Financial Protection Bureau (Bureau or CFPB) is charged with monitoring for risks to consumers in the offering or provision of consumer financial products or services, including developments in markets for such products or services. As part of this mandate, the Bureau is seeking information from credit card issuers, consumer groups, and the public regarding credit card late fees and late payments, and card issuers’ revenue and expenses. For example, the Bureau is seeking information relevant to certain provisions related to credit card late fees in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act or the Act) and Regulation Z. Areas of inquiry include: factors used by card issuers to set late fee amounts; card issuers’ costs and losses associated with late payments; the deterrent effects of late fees; cardholders’ late payment behavior; methods that card issuers use to facilitate or encourage timely payments, including autopay and notifications; card issuers’ use of the late fee safe harbor provisions in Regulation Z; and card issuers’ revenue and expenses related to their domestic consumer credit card operations.
DATES: Comments must be received by July 22, 2022.
Click here to read the full NASCUS Summary (Member login required.)
NASCUS has issued two summaries this week based on NCUA activities.
Summaries require member log-in to review.
The OCC, Board, FDIC, FCA, and NCUA (collectively, the Agencies) are reorganizing, revising, and expanding the Interagency Questions and Answers Regarding Flood Insurance. This revised guidance will assist lenders in meeting their responsibilities under Federal flood insurance law and increase public understanding of the Agencies’ respective flood insurance regulations. Significant topics addressed by the revisions include guidance related to major amendments to the flood insurance laws with regard to the escrow of flood insurance premiums, the detached structure exemption, force placement procedures, and the acceptance of flood insurance policies issued by private insurers. With this issuance, the Agencies are consolidating the Questions and Answers proposed by the Agencies in July 2020 and the Questions and Answers proposed by the Agencies in March 2021 into one set of Interagency Questions and Answers Regarding Flood Insurance.
Read the NASCUS Summary Here
The newly consolidated guidance consists of 144 Questions and Answers (including 24 private flood insurance questions and answers). The full Q&A begins on page 153 covering a broad range of topics. Some key topics addressed by the revisions include guidance related to amendments to the flood insurance laws as they apply to the escrow of flood insurance premiums, certain exemptions for detached structures, procedures for the force placement of insurance, and the acceptance of flood insurance policies issued by private insurers.
NCUA has issued LTCU 22-CU-07 to address the increased use of financial technology by credit unions in their operations and clarify its expectations for credit unions contemplating the use of new or emerging distributed ledger technologies (DLT). This is NCUA’s second LTCU on this issue, as LTCU 21-CU-16 was issued December 2021.
The LTCU identifies the agency’s expectations related to DLTs and explains that credit unions may appropriately use DLT as an underlying technology. The following areas are considerations and NCUA’s expectations for FICUs, however, the NCUA notes this list should not be construed as all inclusive. Federally insured state-chartered credit unions should also look to their own state laws for permissibility prior to adopting DLT for existing operations.
Letter to Credit Unions 22-CU-06: NCUA to Begin Phase 2 of Resuming Onsite Operations
April 2022
Based on new guidance from the Centers for Disease Control and Prevention (CDC) and the Safer Federal Workforce Task Force, the NCUA will enter the second phase (Phase 2) of resuming its onsite operations on April 11, 2022.
Letter to Credit Unions 22-FCU-02: Final Rule on Definition of Service Facility
March 2022
The final rule amending the definition of “service facility” for multiple common-bond FCUs became effective December 27, 2021. The final rule provides that shared locations are service facilities for purposes of multiple common-bond FCU additions of groups and/or underserved areas, regardless of whether the FCU has an ownership interest in the shared branching network providing the locations. Qualifying shared locations include electronic facilities offering required services such as video teller machines.
NCUA Risk Alert: 22-RISK-01 Heightened Risk of Social Engineering and Phishing Attack
March 2022
The on-going conflict in Ukraine has raised concerns about potential cyberattacks in the U.S., including those against the financial services sector. All credit unions and vendors, regardless of size, are potential targets for cyberattacks, like social engineering and phishing attacks, and must remain vigilant. Credit unions should report any cyber incidents to the NCUA, your local FBI field office or the Internet Crime Complaint Center, and the Cybersecurity and Infrastructure Security Agency (CISA).