CFPB releases draft strategic plan for FY 2022-26

Federal Issues Agency Rule-Making & Guidance CFPB Covid-19 Privacy/Cyber Risk & Data Security Consumer Finance

On December 2, the CFPB released for public feedback its draft strategic plan for fiscal years 2022-2026, which outlines and communicates its mission, strategic goals, and objectives for the next five years.

External Factors Impacting the Bureau’s Strategic Goals and Objectives:

The Bureau identified four key external factors that may affect its strategic goals and objectives: (i) the continued effect of the Covid-19 pandemic on regulated markets; (ii) the increase of data security threats and resulting consumer harm as the role of data and technology in the consumer financial system continues to grow; (iii) rapid developments in the consumer financial marketplace technology; and (iv) executive, legislative, judicial, and state actions, including actions by other financial regulators, which may impact the financial regulatory environment and, in turn, the Bureau’s policy strategies. 

Cross-Bureau Priorities:

With its “cross-functional, cross-Bureau approach,” the CFPB intends to address a number of outcomes for households and communities, “many of which reference the concept of equity.” To achieve the outcomes below, the Bureau will “embed a racial equity lens and focus [its] attention on these communities, recognizing that work to protect and empower underserved people benefits all people.”

• Equitable recovery from the COVID-19 pandemic: Continuing monitoring of pandemic recovery, with a focus on minority and traditionally underserved communities, including rising housing insecurity.
• Equitable access to and engagement with consumer finance infrastructure: Addressing obstacles that restrict access to credit or push consumers to higher cost products, in addition to “promoting transformation of financial marketplaces to serve all people.”
• Equitable wealth creation from home and small business ownership: Promoting equitable wealth creation in housing and small business markets, with a focus on minority and underserved communities. Specifically, the Bureau notes that (i) home ownership as a “key building block of wealth,” has become out of reach for young people and underserved communities due to record high home prices and tightened credit underwriting during the pandemic; and (ii) small businesses, especially women- and minority-owned, have faced more serve economic consequences from the pandemic.
• Fair, transparent, and competitive markets for consumer financial products and services: Promoting competition for the benefit of consumers and businesses, where “[t]he personal touch previously provided by local financial institutions has, in many instances, been replaced with institutions that take advantage of consumers without concern for their well-being.” The Bureau identified weakened competition in many markets as a contributing factor in the widening of racial, income, and wealth inequality, and noted that consolidations over the last several decades have “denied consumers the benefits of an open economy.”
• Privacy, access, and fairness in a new data-driven economy: Prioritizing its work to ensure consumer privacy and security remains at the forefront of the evolving data economy. The Bureau expressed specific concern with how consumer financial account data is accessed, transmitted, and stored, in addition to the potential racial equity impact from the increased use of algorithms in the decision-making process.

The Strategic Goals:

The Bureau identified four strategic goals, which are articulated by specific function within the agency:

• “Implement and enforce the law to ensure consumers have access to fair, transparent, and competitive markets that serve consumers’ needs and protect consumers from unfair, deceptive, and abusive practices, and from discrimination.” Objectives include issuing rules and guidance, supervising institutions, and enforcing federal consumer financial laws.
• “Empower consumers to live better financial lives, focusing on traditionally underserved people.” Objectives include engaging with consumers, creating and offering educational resources, handling complaints, and expanding relationships with stakeholders and government partners.
• “Inform public policy with data-driven analysis on consumers’ experiences with financial institutions, products, and services.” Objectives include monitoring markets and producing research reports.
• “Foster operational excellence and further commitment to workforce equity to advance the CFPB’s mission.” Objectives include cultivating a workforce aligned with the Bureau’s mission, implementing a forward-leaning workplace model, and utilizing innovative and optimized operational support.

The Bureau is requesting comments by January 3, 2022.