The CFPB has rescinded seven policy statements issued from March 26 through June 3, 2020 that were intended to provide flexibility to financial institutions in meeting certain compliance requirements during the pandemic. (The Bureau’s press release announcing the rescission of the seven policy statements also announced that the Bureau was rescinding its 2018 bulletin on supervisory communications and replacing it with a new bulletin.) This action follows the Bureau’s rescission last month of its January 2020 policy statement, “Statement of Policy Regarding Prohibition on Abusive Acts or Practices.” While the rescission of the January 2020 bulletin become effective upon its publication in the Federal Register, the rescissions of the seven policy statement and 2018 bulletin became effective yesterday, the day after they were announced by the Bureau.
The rescission of the policy statements was foreshadowed by Acting Director Uejio in his statement to Bureau staff which he shared in a February blog post. In the statement, Mr. Uejio indicated that he planned to reverse policies of the Trump Administration “that weakened enforcement and supervision,” including by “rescind[ing] public statements conveying a relaxed approach to enforcement of the laws in our care.” The CFPB’s press release announcing the rescission of the seven policy statements includes the statement that “[w]ith the rescissions, the CFPB is providing notice that it intends to exercise the full scope of the supervisory and enforcement authority provided under the Dodd-Frank Act.”
The rescissions of the policy statements are set forth in notices to be published in the Federal Register. The rescinded policy statements are:
- Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic (March 26, 2020). In its rescission notice, the CFPB also states that it “does not intend to continue to provide any flexibilities afforded entities” under the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (April 7, 2020) and the Interagency Statement on Appraisals and Evaluations for Real Estate Related Financial Transactions Affected by the Coronavirus (April 14, 2020).
- Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act (March 26, 2020). The CFPB’s rescission notice also instructs all financial institutions required to file quarterly to do so beginning with their 2021 first quarter data, due on or before May 31, 2021, for all covered loans and applications with a final action taken date between January 1 and March 31, 2021. The notice also states that the Bureau does not intend to cite in an examination or initiate an enforcement action against any entity that did not make the quarterly filing for data collected in 2020.
- Statement on Supervisory and Enforcement Practices Regarding CFPB Information Collections for Credit Card and Prepaid Account Issuers (March 26, 2020). The CFPB’s rescission notice includes guidance as to how issuers should now meet the specified information collections requirements relating to credit card and prepaid accounts.
- Statement on Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act (April 1, 2020). The CFPB’s rescission notice states that the rescission does not apply to the portion of the statement under the heading “Furnishing Consumer Information Impacted by COVID-19.” In that portion of the statement, the CFPB expressed support for furnishers’ voluntary efforts to provide payment relief and indicated that the CFPB did not intend to cite in examinations or take enforcement actions against those who furnish information to consumer reporting agencies that accurately reflect the payment relief measures they are employing. In the rescission notice, the CFPB states that it “does not intend to cite in an examination or initiate an enforcement action against any entity that did not comply with the FCRA and Regulation V requirements as described in Statement between April 1, 2020 and March 31, 2021.”
- Statement on Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J (April 27, 2020). The CFPB’s rescission notice instructs land developers subject to ILSA and Regulation J to resume filing of annual reports of activity and financial statements as specified in Regulation J. It also states that the Bureau does not intend to take supervisory or enforcement action against developers for delays in filing annual reports of activity and financial statements who make any such delayed submission by April 30, 2021 for the time period that the statement was in effect beginning April 27, 2020 through April 30, 2021.
- Statement on Supervisory and Enforcement Practices Regarding Regulation Z Billing Error Resolution Timeframes in Light of the COVID-19 Pandemic (May 13, 2020)
- Statement on Supervisory and Enforcement Practices Regarding Electronic Credit Card Disclosures in Light of the COVID-19 Pandemic (June 3, 2020)
In each of the rescission notices to be published in the Federal Register, the CFPB provides its rationale for why the flexibilities provided by the rescinded policy statement are no longer warranted. Underlying all of the rescissions is the Bureau’s view that since it released the statements, the circumstances that prompted the statements have changed. In the CFPB’s view, companies have had sufficient time to adapt to the pandemic and adjust their operations as needed to satisfy their compliance obligations. To explain several of the rescissions, the Bureau points to companies’ adjustment of operations since March 2020 by, for example, shifting to remote modes of operation. It also points to the rescission and modification by states and other jurisdictions of stay-at-home orders, stating that “the Bureau has learned that many entities have resumed some level of in-person operations and, in many instance combined with more robust capabilities, have demonstrated improved business continuity.”
The rescissions are clearly another example of Acting Director Uejio’s efforts to send the message that “there’s a new sheriff in town.” All consumer financial services providers, not only those who have availed themselves of the flexibilities provided by the rescinded statements, should be responding to that message by reviewing their compliance practices to make sure their houses are in order.