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Special Alert: CFPB releases Supplemental Notice of Proposed Rulemaking on Time-Barred Debt Disclosures
On February 21, the CFPB issued a Supplemental Notice of Proposed Rulemaking (NPRM) to amend Regulation F, which implements the Fair Debt Collection Practices Act (FDCPA), to require debt collectors to make certain disclosures when collecting time-barred debts (the “Supplemental Proposed Rule”).
The Supplemental Proposed Rule adds to the CFPB’s proposed rule, issued May 7, 2019, (InfoBytes coverage here), to amend Regulation F to broadly implement the FDCPA, with respect to third-party debt collectors (the “Proposed Rule”). The Bureau noted when releasing the earlier Proposed Rule that it was contemplating additional disclosure requirements for time-barred debt, and reserved space for such disclosures within Regulation F, as then proposed. The CFPB released several documents related to the Supplemental Proposed Rule, including a fact sheet discussing the Supplemental Proposed Rule and a report on the disclosure of time-barred debt and the right of revival, providing findings from quantitative disclosure testing that the CFPB conducted.* * *
Click here to read the full special alert.
If you have any questions regarding Time-Barred Debt Disclosures or other related issues, please visit our Debt Collection & Buying practice page or contact a Buckley attorney with whom you have worked in the past.FDIC guide encourages fintech/bank partnerships
On February 24, the FDIC’s technology lab, FDiTech, announced the release of a new guide intended to assist fintech companies and other third parties with bank partnerships. Conducting Business with Banks: A Guide for Fintechs and Third Parties identifies several areas for third parties to consider when exploring potential partnerships with banks relevant to navigating regulatory requirements and due diligence processes. These include being able to: (i) “[u]nderstand the framework of laws and regulations” applicable to banks, such as those “related to consumer protection, privacy and data security, . . . the Bank Secrecy Act[,] and federal anti-money laundering laws”; (ii) “[m]aintain a well-managed and financially strong business”; (iii) respond to requests for information from potential partners that demonstrate “product integrity, risk management mitigation, and consumer protection”; and (iv) demonstrate the ability to ensure ongoing compliance with applicable laws and regulations and that appropriate monitoring systems have been implemented. In addition, the guide also outlines special considerations for modelers, and emphasizes that banks will expect to understand a third party’s use of models and algorithms or other automated decision-making systems.
As previously covered by InfoBytes, FDiTech was established in 2019 to encourage innovation within the banking industry, support collaboration for piloting new products and services, eliminate regulatory uncertainty, and manage risks.
FDIC seeks input on modernization
On February 19, the FDIC issued a notice and request for comment regarding modernizing “its signage and advertising requirements to better reflect how banks and savings associations currently operate and how consumers use banking services.” The Request for Information (RFI) solicits input on how the agency “can revise and clarify its sign and advertising rules related to FDIC deposit insurance.” Major changes to these rules have not been made since 2006, and the agency states that “the rules do not reflect evolving banking channels and operation.” Accordingly, the RFI also requests suggestions about how the FDIC can use technology or other solutions to help consumers distinguish FDIC-insured entities from nonbanks, and to prevent consumers from being harmed by non-insured entities’ potentially misleading or fraudulent representations. The RFI lists 21 questions to focus the public input. Comments must be received by March 19.
GSEs update interactive URLA
On January 29, Freddie Mac and Fannie Mae (GSEs) jointly announced the release of the updated interactive (fillable) pdf version of the Uniform Residential Loan Application (URLA), also known as Freddie Mac Form 65 and Fannie Mae Form 1003. The announcement also identifies a number of supporting documents published in connection with the new URLA, including instructions on how to complete the new form and a list of Frequently Asked Questions. An appendix at the end of the announcement illustrates improvements from the old application to the new application. Additionally, the GSEs have URLA pages on their websites to provide more information (see Freddie Mac’s URLA page here and Fannie Mae’s URLA page here). The effective date for the updated URLA is September 1, and lenders must begin using the new URLA form on November 1.
FDIC and OCC expand comment period for CRA proposal
On February 19, the FDIC and the OCC jointly released a statement extending the public comment period for the proposed Community Reinvestment Act regulations by 30 days. As previously covered by a Buckley Special Alert, the two agencies initially released the notice of proposed rulemaking—which the agencies assert will provide clarity on what activities are eligible for CRA consideration—on December 12. The new comment deadline is April 8.
Agencies finalize Call Report capital-related reporting revisions
On February 19, the FDIC issued FIL-11-2020 announcing the Federal Reserve Board, FDIC, and OCC have finalized capital-related reporting revisions (see Federal Register notice and FIL-10-2020) to the Consolidated Reports of Condition and Income (Call Reports) for certain banks (FFIEC 031, 041, 051) as well as the Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework (FFIEC 101). Among other things, the final revisions include changes to the capital simplifications rule and the community bank leverage ratio rule, in addition to Call Report instructional revisions taking effect in 2021 concerning reporting home equity lines of credit that convert from revolving to non-revolving status. These reporting revisions are subject to approval by OMB.
FDIC issues 2020 stress testing scenarios
On February 14, the FDIC released economic scenarios—developed in coordination with the Federal Reserve Board (Fed) and the OCC—for certain supervised financial institutions with consolidated assets of more than $250 billion. The Dodd-Frank Act requires financial companies to run stress tests using the scenarios. According to the FDIC, the scenarios cover a baseline scenario that is “in line with a survey of private sector economic forecasters” and a severely adverse scenario “designed to assess the strength and resilience of financial institutions.”
As previously reported by InfoBytes, the OCC and the Fed both released their stress testing scenarios on February 6.
CFPB updates FCRA exam procedures
On February 11, the CFPB issued updates to its Supervision and Examination Manual to include requirements of the FCRA created by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The updates apply to the examination procedures covering consumer reporting, larger participants, and education loans, and aim to reduce instances of consumer compliance law violations by companies that provide consumer financial products and services. According to the CFPB, the larger participants examination procedures provide guidance to examiners covering a number of areas including, among other things, (i) “accuracy of information and furnisher relations”; (ii) “contents of consumer reports”; (iii) “consumer inquiries, complaints, and disputes and the reinvestigation process”; (vi) “consumer alerts and identity theft provisions”; and (v) “other products and services and risks to consumers.” The Bureau’s guidance to examiners on education loan exam procedures concentrates on servicing and origination. Some of the topics included are: (i) “advertising, marketing, and lead generation”; (ii) “customer application, qualification, loan origination, and disbursement”; (iii) “student loan servicing”; (iv) “borrower inquiries and complaints”; and (v) “information sharing and privacy.”
FDIC introduces deposit insurance application for nonbanks
On February 10, the FDIC issued FIL-8-2020, which incorporates Procedures for Deposit Insurance Applications from Applicants that are Not Traditional Community Banks into its Deposit Insurance Application Procedures Manual (manual). In addition to the updating the manual, the agency also issued a handbook, entitled Applying for Deposit Insurance – A Handbook for Organizers of De Novo Institutions (handbook), advising that the updated manual together with the handbook provide comprehensive instructions for completing deposit insurance applications. According to the letter, the updated manual and the handbook contain mostly “technical edits and clarifications” and are meant to “provide transparency and clarity” for applicants. The letter also supplies the definitions of “non-bank” and “non-community bank.”
FFIEC releases 2020 HMDA reporting guide
On February 13, the FDIC issued FIL-9-2020 announcing the Federal Financial Institutions Examinations Council’s issuance of the 2020 edition of the “Guide to HMDA Reporting: Getting It Right!” The guide applies to HMDA data collected in 2020 that will be reported to supervisory agencies by March 1, 2021, and includes, (i) a summary of responsibilities and requirements; (ii) directions for assembling the necessary tools; and (iii) instructions for reporting HMDA data. According to the announcement, the 2020 edition provides information to assist HMDA compliance in the event of a merger or acquisition, as well as updates to the appendices to reflect amendments to Regulation C made by the CFPB that took effect January 1. As previously covered by InfoBytes, the amendments extend the current temporary threshold of 500 open-end lines of credit under HMDA rules for reporting data to January 1, 2022.