The CFPB has published its Fall 2019 rulemaking agenda as part of the Fall 2019 Unified Agenda of Federal Regulatory and Deregulatory Actions, which is coordinated by the Office of Management and Budget.  It represents the CFPB’s second rulemaking agenda under Director Kraninger’s leadership.  The agenda’s preamble indicates that the information in the agenda is current as of July 25, 2019 and identifies the regulatory matters that the Bureau “reasonably anticipates having under consideration during the period from October 1, 2019 to September 30, 2020.”

The Bureau issued a proposed debt collection rule in May 2019.  In the preamble to the rulemaking agenda, the Bureau states that it is testing consumer disclosures related to time-barred debt disclosures and, after testing, will assess whether to issue a supplemental proposal seeking comments on a proposal concerning such disclosures.  The agenda indicates that the Bureau expects to issue a final debt collection rule in 2020.

The only other noteworthy information in the preamble is the Bureau’s announcement that in light of the feedback it received in response to the series of RFIs it issued in 2018, it has decided to add two new items to its long-term regulatory agenda.  One item is a possible rulemaking to address feedback the Bureau received that its loan originator compensation requirements are too restrictive.  The Bureau plans to examine whether it should (1) permit adjustments to a loan originator’s compensation in connection with originating state housing finance authority loans to facilitate the origination of such loans, and (2) permit creditors to decrease an originator’s compensation due to the originator’s error.

The second item the Bureau plans to add to its long-term regulatory agenda relates to feedback it received that the intersection of certain Regulation Z requirements and E-SIGN are too restrictive for consumers applying for credit cards electronically and for consumers willing, or preferring, to only receive information electronically.  The Bureau is considering a rulemaking to address “a range of issues at the intersection of E-SIGN and Regulation Z with regard to credit cards.”  Noting that similar concerns about the effect of E-SIGN were raised with respect to other consumer financial products and services including checking accounts, the Bureau states that it anticipates what it learns in the credit card context may assist it in assessing whether there are similar concerns with other products and services that may be appropriate to address in future rulemakings.

In addition to debt collection, other current rulemakings listed in the agenda are:

  • Payday Rule.  In February 2019, the Bureau issued a proposal to rescind the ability to repay provisions of its final payday/auto title/high-rate installment loan rule.  The agenda estimates issuance of a final rule in April 2020.
  • Business lending data (Dodd-Frank Section 1071).  Section 1071 amended the ECOA to require financial institutions to collect and maintain certain data in connection with credit applications made by women- or minority-owned businesses and small businesses.  Such data includes the race, sex, and ethnicity of the principal owners of the business.  The Bureau held a symposium on Section 1071 last month.  No timetable for rulemaking is provided in the agenda.  However, the CFPB discussed its rulemaking plans in its cross-motion for summary judgment filed earlier this month in the lawsuit brought by the California Reinvestment Coalition, the National Association for Latino Community Asset Builders, and two individual small business owners seeking a declaration that the CFPB’s failure to issue regulations implementing Section 1071 violates the Administrative Procedure Act and requiring the CFPB to promptly issue such regulations.  The Bureau stated that it “intends to complete its internal policymaking process in the  next six months,” and within six months thereafter (estimated to be by next November),  it “expects to release a detailed outline of the proposals under consideration” to be followed by a report issued by a SBREFA panel “within two months of being officially convened.”  It notes, however, that because “the Bureau cannot predict the nature and extent of the comments it will receive in connection with the SBREFA process, or that it will receive in response to a notice of proposed rulemaking…the Bureau’s plan does not yet include intended dates for the issuance of a proposed or final rule.”
  • PACE financing.  In March 2019, the CFPB issued an advance notice of proposed rulemaking to solicit information on Property Assessed Clean Energy (PACE) financing.  The agenda estimates that pre-rule activity will occur in December 2019 to address
  • Qualified mortgages.  The Bureau estimates action in December 2019 in connection with the scheduled expiration of the temporary GSE QM category.
  • HMDA.  In May 2019, the CFPB issued a proposed HMDA rule concerning the volume threshold that triggers reporting of open-end credit lines and closed-end mortgage loans.  Last month, the Bureau issued a final rule concerning an extension of the temporary threshold for open-end credit lines.  It estimates that it will issue and another final rule in March 2020 concerning the permanent thresholds for both open-end credit lines and closed-end mortgage loans.

In addition to loan originator compensation and E-SIGN requirements, other long-term agenda items (for which no time estimates for further action are given) include:

  • Abusive Acts and Practices.  The Bureau held a symposium in June 2019 to inform its next steps regarding a possible rulemaking to clarify the meaning of “abusive.”
  • Inherited Regulations.  These are the existing regulations that the CFPB inherited from other agencies through the transfer of authorities under the Dodd-Frank Act.  The CFPB indicates that it expects to focus its initial review on the subparts of Regulation Z  that implement TILA with respect to open-end credit and credit cards in particular.  By way of example, the CFPB states that it expects to consider adjusting rules concerning the database of credit card agreements it is required to maintain by the CARD Act “to reduce [the] burden on issuers that submit credit card agreements to the Bureau and make the database more useful for consumers and the general public.”  The CFPB states it may launch additional projects after reviewing the responses it received to its RFIs on the inherited regulations and rules issued by the CFPB.
  • Consumer Access to Financial Records.  In November 2016, the CFPB issued a RFI about market practices related to consumer access to financial information.  The Bureau will continue to monitor market developments and evaluate possible policy responses to issues identified, including potential rulemaking.  Possible topics the Bureau might consider include specific acts or practices and consumer disclosures. In addition, the Bureau plans to consider “whether clarifications or adjustments are necessary with respect to existing regulatory structures that may be implicated by current and potential developments in this area.”  The Bureau expects to hold a symposium on consumer-authorized financial data sharing in 2020.

The Bureau’s regulatory priorities could change significantly if the U.S. Supreme Court rules in Seila Law that the Dodd-Frank Act provision that allows the President to remove the Bureau’s Director only “for cause” is unconstitutional and the appropriate remedy is to sever that provision.  Such a decision would allow a Democratic President, if elected in 2020, to remove Director Kraninger without cause.

 

The OCC and FDIC issued proposed rules this week intended to eliminate the uncertainty created by the Second Circuit’s decision in Madden v. Midland Funding.  In that decision, the Second Circuit held that a nonbank that purchased charged-off loans from a national bank could not charge the same rate of interest on the loan that Section 85 of the National Bank Act (NBA) allowed the national bank to charge.  The proposals would codify each agency’s interpretation that a bank loan assignee can charge the same interest rate that the bank is authorized to charge under federal law.  Comments on the OCC’s proposal must be submitted by January 21, 2020.  Comments on the FDIC’s proposal must be submitted no later than 60 days after the date the proposal is published in the Federal Register.

The rules rely on the power of national banks, federal savings associations, and state banks to make loans, assign loans to third parties, and charge interest on such loans.  With regard to interest rate authority, the OCC points to Section 85 (applicable to national banks) and 12 U.S.C. §1463(g) (the provision of the Home Owners’ Loan Act (HOLA), patterned on Section 85 and applicable to both federal and state-chartered savings associations).  These provisions give national banks and savings associations “most favored lender” status, meaning they can charge interest at the highest rate allowed to any lender by the laws of the state where the national bank or savings association is located and can also “export” that rate to borrowers in other states, regardless of any other state law purporting to limit interest charges.  The FDIC points to Section 27(a) of the Federal Deposit Insurance Act (FDI Act), 12 U.S.C. §1831d(a), also patterned on Section 85, which allows an FDIC-insured state bank to export to out-of-state borrowers the interest rate permitted by the state in which the state bank is located to its most favored lender, regardless of any contrary laws of such borrowers’ states.

As support for their interpretations, both agencies reference the “valid-when-made” and “stands-in-the shoe” principles.  As articulated by the agencies, the “valid-when-made” principle provides that a loan that is non-usurious at origination does not subsequently become usurious when assigned.  The “stands-in-the shoe” principle provides that a loan does not become usurious after assignment because the assignee stands in the assignor’s shoes when enforcing the contractually agreed upon interest term.

The OCC rule would provide: “Interest on a loan that is permissible under 12 U.S.C. 85 [or 12 U.S.C 1463(g)(1)] shall not be affected by the sale, assignment, or other transfer of the loan.”

The FDIC rule would provide: “Whether interest on a loan is permissible under section 27 of the Federal Deposit Insurance Act is determined as of the date the loan was made.  The permissibility under section 27 of the Federal Deposit Insurance Act of interest on a loan shall not be affected by any subsequent events, including … the sale, assignment, or other transfer of a loan.”

The OCC’s rule would be added to 12 C.F.R. §7.4001 which interprets a national bank’s interest rate authority under Section 85 and 12 C.F.R. §160.110 which interprets a savings association’s interest rate authority under 12 U.S.C. §1463(g).  The FDIC’s rule would become part of previously-reserved 12 C.F.R. Part 331.  Part 331 would be titled “Federal Interest Rate Authority” and in addition to the new rule above addressing loan assignments, would include other rules intended to implement Section 27 of the FDI Act as well as FDI Act Section 24(j) (which deals with the application of state law to a branch of a state bank located in a state in which the bank is not chartered).

Both agencies elected not to address a second major source of uncertainty concerning the interest rate authority of loans that are made by banks with substantial origination, marketing and/or servicing assistance from nonbank third parties.  At least where the nonbank agent acquires the “predominant economic interest” in the loans, the interest charges have been challenged by enforcement authorities and plaintiffs’ attorneys on the theory that the nonbank agent is the “true lender,” and therefore the loan is subject to state licensing and usury laws.

The OCC stated that its proposed rule “would not address which entity is the true lender when a bank makes a loan and assigns it to a third party” and that “[t]he true lender issue, which has been considered by courts recently, is outside the scope of this rulemaking.”  Likewise, the FDIC stated that its proposed rule does not “address the question of whether a State bank … is a real party in interest with respect to a loan or has an economic interest in the loan under state law, e.g. which entity is the ‘true lender.’”  The FDIC added that “it will view unfavorably entities that partner with a State bank with the sole goal of evading a lower interest rate established under the law of the entity’s licensing State(s).”

We are pleased that the OCC and FDIC have squarely addressed the problem created by the Madden decision (an action we have advocated for) but disappointed that they have chosen not to grapple with the “true lender” issue at this time.  As recognized by the U.S. Supreme Court in its seminal Marquette decision, banks have a need for certainty in their lending operations.  It is Congress or the banking agencies, through their legislative, rule-making and supervisory powers, and not the courts, through piece-meal litigation, who are best suited to determining when a loan is properly made by a bank or savings association under its home-state rate authority.

In our view, each agency should adopt a rule that provides loans funded by a bank in its own name as creditor are fully subject to Section 85 or Section 27(a) and other provisions of the NBA, HOLA or FDIC Act, as applicable, for their entire term.  The rule should clarify that this does not give financial institutions a free ride; rather, they are expected to manage and supervise the lending process in accordance with OCC or FDIC guidance and will be subject to regulatory consequences if and to the extent that loan programs are unsafe or unsound or fail to comply with applicable law.  In other words, it is the origination of the loan by a bank or savings association (and the attendant legal consequences if the loans are improperly originated), and not whether the bank retains the predominant economic interest in the loan, that should govern the regulatory treatment of the loan under federal law.

We are also disappointed by the FDIC’s statement that it will take an unfavorable view of bank-nonbank partnerships, where the “sole goal [is] evading” state-law rate limits.  This statement appears to be taken directly from the bulletin issued by the OCC in May 2018, setting forth core lending principles and policies and practices for short-term, small-dollar installment lending by national banks, federal savings banks, and federal branches and agencies of foreign banks.  The FDIC’s statement could be read to call into question a valuable distribution channel for bank loans and seems at odds with the broad view of federal preemption enunciated by the FDIC in the proposal with respect to Section 27(a) as well as the FDIC’s stated goal of eliminating uncertainty regarding the enforceability of interest rate terms.  At the very least, the FDIC should clarify that the propriety of relationships of this type is a matter for the FDIC to address in the supervisory process and not a matter for the courts to address as a matter of law.

Despite our griping that the OCC and FDIC are not dealing with the “true lender” argument in their proposals, we believe that, overall, the proposals represent a very positive step forward.  Unsurprisingly, the proposals have already generated a storm of criticism and threats of eventual litigation from consumer advocates with more paternalistic views than our own.  Madden and “true lender” controversy are likely to remain for many years in the future.

 

In this podcast, we examine the fair lending risk to financial services providers that use targeted marketing.  After reviewing what targeted marketing is, the forms it can take, and current litigation, we discuss the potential fair lending claims and the options available to providers to reduce the fair lending risk created by the use of third-party targeted marketing platforms.

Click here to listen to the podcast.

Due to the Thanksgiving holiday, our next podcast will be released on December 5.

Last week, the New York Department of Financial Services (“NYDFS”) announced a proposed new regulation that provides greater flexibility for entities licensed, chartered, authorized, registered, or supervised by the NYDFS to disclose confidential supervisory information (“CSI”) to legal counsel and independent auditors. The proposal would make NY Banking Law more consistent with federal law, which generally permits supervised institutions to share CSI, such as exam reports, with their advisors and auditors without getting approval from their regulators.

Currently, regulated entities must receive prior written approval from NYDFS each time they want to share CSI with their legal counsel or independent auditors. See Section 36.10 of the NY Banking Law (which generally provides that CSI shall remain confidential “and shall not be made public unless, in the judgment of the superintendent, the ends of justice and the public advantage will be subserved by the publication thereof”).

The new proposed regulation would permit a regulated entity to share CSI with its legal counsel or independent auditor without prior written approval from the NYDFS if there is a written agreement between the regulated entity and their counselor or auditor in which the lawyer or auditor agrees, among other things:

  • To keep such information confidential;
  • To only use disclosed CSI for the purpose of providing legal representation or auditing services to the regulated entity;
  • Not to disclose the CSI to its employees, officers, or directors except to those that “need to know” and only on the condition that they maintain confidentiality of the information;
  • To notify the NYDFS of any demand or request for the CSI and to assert on behalf of the NYDFS “all such legal privileges and protections as the [NYDFS] may request”; and
  • To obtain any required prior consent or approval from any other state or federal agency and to execute a statement affirming such consents and approvals were obtained, or if no other consents or approvals are required, so stating.

The proposed regulation also provides that the regulated entity must keep a written record of all CSI disclosed pursuant to the regulation and a copy of each written agreement.

The new proposed regulation is subject to a 60-day comment period following publication in the NY State Register later this month.

The Task Force on Financial Technology of the House Financial Services Committee has scheduled a hearing entitled “Banking on Your Data: The Role of Big Data in Financial Services” on November 21, 2019. The Task Force is expected to explore, in part, a legal framework for big technology firms that have entered the financial marketplace.

The scheduled witnesses include:

  • Ms. Lauren Saunders, Associate Director, National Consumer Law Center
  • Dr. Seny Kamara, PhD., Associate Professor of Computer Science, Brown University and Chief Scientist, Aroki Systems
  • Dr. Christopher Gillard, PhD., Professor of English, Macomb Community College and Digital Pedagogy Lab Advisor
  • Mr. Don Cardinal, Managing Director, Financial Data Exchange (“FDX”)
  • Mr. Duane Pozza, Partner, Wiley Rein

Click here for the Committee Memorandum and proposed legislation.

Although the CFPB now agrees that its structure is unconstitutional, it has filed a brief opposing the Petition for a Writ of Certiorari Before Judgment filed by All American Check Cashing with the U.S. Supreme Court.  All American’s interlocutory appeal from the district court’s ruling upholding the CFPB’s constitutionality is still pending before the Fifth Circuit (and a second oral argument is scheduled for December 4).  In its petition, All American argued that “there is nothing to be gained by waiting [for the Fifth Circuit’s decision]” because the arguments regarding the CFPB’s constitutionality have already been exhaustively explored in the circuit courts.

Having filed its petition before the Supreme Court granted Seila Law’s certiorari petition, All American argued that its case was a better vehicle than Seila Law for deciding the constitutionality question but that, at a minimum, its case should be heard as a companion case to Seila Law.  All American’s petition presents two questions: whether the CFPB’s structure violates the separation of powers and whether a constitutional defect would entitle a company subject to a CFPB enforcement action to “meaningful relief, such as dismissal of the action.”

In addition to arguing in its opposition that granting All American’s petition “would do nothing to enhance” the Supreme Court’s consideration of the constitutionality question also presented in Seila Law, the CFPB argues that All American’s second question does not warrant Supreme Court review.  According to the Bureau, “lower courts have not yet addressed the particular issue here—whether an enforcement action that was filed by an official who was unconstitutionally insulated from removal by the President must be dismissed even where an official fully accountable to the President decides that it should move forward.”  The Bureau observes that there is no circuit conflict on related remedial issues, with “the few reasoned decisions that address related issues [agreeing] that [a separation-of-powers violation] does not compel invalidation of the agency’s action if those actions are subsequently approved in compliance with separation-of-powers requirements.”

In addition, the Bureau notes that “the ratification is implicated in at most a handful of cases” and asserts that the courts “adjudicating those cases can decide that issue in the first instance if an when doing so becomes necessary.”  (The Bureau states in a footnote that the constitutional issue has not been preserved in all of the 19 enforcement actions it currently has pending.)  Finally, the CFPB asserts that All American’s argument that the proper remedy for a constitutional violation is dismissal of the CFPB’s enforcement action is wrong on the merits because ratification by a CFPB Director who is subject to appropriate Executive oversight can cure any constitutional defect.

In its reply brief, All American reasserts its argument that actions by an unconstitutional agency cannot be made valid through ratification and that “[t]he only remedy to address the CFPB’s structural flaws is dismissal.”  It also argues that its case presents “a crucial companion issue to the merits question that the Court will resolve in Seila Law” and “the only opportunity for the Court to consider the full remedial consequences of the CFPB’s unconstitutionality.”  All American contends that if the Court does not resolve the remedial question now, it will haunt the CFPB’s pending enforcement actions “not to mention other invalid CFPB actions, and cases concerning the acts of the Federal Housing Finance Agency or any other unconstitutionally structured agency.”  All American states that it is “prepared to expedite briefing in this case to allow it to be heard together with Seila Law.”  It suggests a briefing schedule “in which the opening brief is filed 14 days after the petition is granted [which] would allow the CFPB to have the full 30 days to respond, and still enable this Court to schedule this case, as well as Seila Law, as early as February.”

All American also notes in its reply brief that a group of 11 (Republican) state Attorneys General have filed an amicus brief in support of All American’s petition.  In their brief, the AGs also reject the CFPB’s ratification argument.  They urge the Supreme Court to resolve the “lingering question of whether the appropriate remedy [for the CFPB’s unconstitutionality] changes simply because an actor who claims to be removable at will purports to ratify the decision of an otherwise unconstitutional agency” and assert that “delay will only serve to prolong confusion in the multi-billion-dollar market in consumer financial products.”

The briefs in All American have been distributed for the Supreme Court’s conference on December 6.   While the Supreme Court might grant All American’s petition and make All American a companion case to Seila Law, it might instead grant the petition but hold All American until it decides Seila Law.

 

 

 

 

 

 

A group of 22 state Attorneys General have sent a letter to the Department of Education seeking information “to determine whether the [ED] is providing relief to thousands of former ITT Tech students as required by federal law.”  The use of the seals of the Kentucky, Massachusetts, and Oregon AGs on the first page of the letter suggests that these AGs are taking the lead on the inquiry.

In their letter, the AGs cite provisions of ED regulations that require the ED to discharge federal student loans at closed schools subject to certain conditions.  The AGs indicate that they have been unable to confirm with the ED the accuracy of reports they have seen about the amount of relief the ED has given so far to ITT students.  They ask the ED to “clarify whether all eligible ITT students are now receiving the automatic discharges to which they are entitled” and “provide information sufficient to confirm that deserving ITT students have not been excluded from the automatic discharge program.”

The letter contains a list of questions to which the AGs request responses.  One notable question asks the ED whether it considered using an eligibility period beyond 120 days of ITT’s closure and, if not, why not.  Another begins with a claim that the ED previously failed to inform prior servicers when closed-school discharges were processed post-default, resulting in negative information from servicers remaining on borrowers’ credit report.  The AGs ask the ED when it will instruct prior servicers of defaulted loans and credit reporting agencies to remove information relating to discharged loans from credit reports of ITT borrowers.

 

 

The Subcommittee on Consumer Protection and Financial Institutions of the House Financial Services Committee has scheduled a hearing entitled “An Examination of Regulators’ Efforts to Preserve and Promote Minority Depository Institutions” on November 20, 2019.  In its first hearing on minority depository institutions, the Subcommittee examined the unique challenges facing MDIs and the communities they serve.  This hearing will focus on the prudential regulators that oversee MDIs.

The scheduled witnesses include:

  • Beverly Cole, OCC Deputy Comptroller for the Northeastern District and Designated Federal Officer for the Minority Depository Institutions Advisory Committee
  • Betty Rudolph, FDIC National Director for MDIs and CDFIs
  • Arthur W. Lindo, Federal Reserve Board Deputy Director, Division of Supervision and Regulation
  • Martha Ninichuk, NCUA Director of the Office of Credit Union Resources and Expansion

Click here for the Committee Memorandum.

 

The FCC has issued a notice announcing that it is seeking comment on a petition filed by Capital One Services, LLC (Capital One) that asks the FCC to issue a declaratory ruling to confirm that the recipient of an opt-out request sent in response to a text message does not violate the Telephone Consumer Protection Act (TCPA) by sending a confirmation text message to clarify the scope of the request.  Comments are due by December 9, 2019 and reply comments are due by December 24, 2019. 

Capital One’s petition describes an “intelligent assistant” tool it has developed that enables customers to receive different categories of informational text messages such as fraud alerts, payment reminders, and low balance or available credit notices.  Customers can also use the tool to send text messages seeking information from Capital One, such as available balance or other details about the customer’s account.  To enroll to receive or send text messages using the tool, a customer must affirmatively provide his or her mobile phone number and consent to receive information through the tool via text message.  Because the tool transmits multiple categories of informational text messages, if a customer revokes his or consent in response to a particular text message (such as by replying “STOP,”), it may not be clear whether the customer wants to opt-out of all text messages sent using the tool or only the category of text message to which the consumer replied “STOP.”

In its 2012 declaratory ruling in Soundbite Communications, the FCC clarified that a sender of text messages can confirm a recipient’s revocation request without violating the TCPA by sending a one-time opt-out confirmation text message within a short period of receiving the request.  The FCC concluded that a consumer’s prior express consent to receive text messages included receiving a one-time opt-out confirmation text message.

Soundbite, however, involved a text message program in which the sender only sent messages concerning one category of information.  As a result, the scope of a consumer’s opt-out request would always be clear to the sender.  In its petition, Capital One asks the FCC to confirm that a text message clarifying the scope of an opt-out request in a program where the consumer has consented to receive multiple categories of informational text messages is also permissible under Soundbite and does not violate the TCPA.

 

 

The CFPB has filed a cross-motion for summary judgment in the lawsuit filed by the California Reinvestment Coalition, the National Association for Latino Community Asset Builders, and two individual small business owners seeking a declaration that the CFPB’s failure to issue regulations implementing Section 1071 violates the Administrative Procedure Act and an order directing the CFPB to issue such regulations within six months.  Earlier this month, the plaintiffs filed a motion for summary judgment and the case was assigned to a mediator.

The Bureau filed an answer to the amended complaint in which it asserted two affirmative defenses: the plaintiffs lack standing to bring the action and their APA claim is barred by the applicable statute of limitations.  The plaintiffs claim they are entitled to the relief they seek under the APA provision that allows a court to compel agency action that is “unreasonably delayed.”  Relying on Ninth Circuit precedent, the Bureau characterizes such an order as “a form of mandamus” that is justified only in “exceptional circumstances.”

The Bureau asserts such circumstances do not exist and it is not unreasonable for it to have not yet issued a Section 1071 rule because:

  • It “has made considerable progress in undertaking the information-gathering necessary to support an informed rulemaking
  • In Dodd-Frank, Congress assigned it multiple mandatory rulemakings but did not include Section 1071 rulemaking among those for which it imposed statutory deadlines, thus providing a “strong signal that Congress did not expect the Bureau to begin work on the Section 1071 rulemaking right away”
  • It “has a plan to ensure that it can promptly issue a thoughtful and effective rule to implement Section 1071”

In describing its rulemaking plan, the Bureau states that the plan “focuses on the next year of its rulemaking work.”  The Bureau “intends to complete its internal policymaking process in the  next six months” and within six months thereafter (estimated to be by next November), it “expects to release a detailed outline of the proposals under consideration” to be followed by a report issued by a SBREFA panel “within two months of being officially convened.”  However, because “the Bureau cannot predict the nature and extent of the comments it will receive in connection with the SBREFA process, or that it will receive in response to a notice of proposed rulemaking…the Bureau’s plan does not yet include intended dates for the issuance of a proposed or final rule.”  The Bureau notes, however, that “for completed rulemakings that went through the SBREFA process in recent years, the Bureau took roughly three to eleven months to issue a notice of proposed rulemaking after completion of the SBREFA process, and approximately eleven months to issue a final rule after the end of the proposal’s comment period.”

The Bureau further argues that the “exceptional circumstances” required for mandamus do not exist because: (1) the completion of rulemaking, while in the public interest, is not necessary to protect human health and rushing to issue a poorly designed rule could harm the businesses Section 1071 was meant to help, and (2) expediting the Section 1071 rulemaking further could interfere with other important regulatory projects such as addressing the temporary qualified mortgage provision.

The Bureau also makes the alternative argument that assuming the plaintiffs are entitled to any relief, such relief should not include a rulemaking deadline but should be limited to requiring the Bureau to issue periodic status reports on its rulemaking.  According to the Bureau, imposing such a deadline is only appropriate where it is necessary to protect human health or to deal with an agency that has ignored prior judicial warnings or mandates.

In its cross-motion, the Bureau references the symposium on Section 1071  that it held on November 6, 2019 as one of the actions it has taken to commence Section 1071 rulemaking.