The 60-day period during which the Senate could pass a resolution under the Congressional Review Act disapproving the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule) with only a simple majority appears to have expired yesterday.  Although the Senate’s failure to pass a CRA resolution is disappointing because the CRA would have provided the “cleanest” vehicle for overturning the Payday Rule, we were always doubtful that there would be 51 votes in the Senate to pass a CRA resolution.

The focus of efforts to undo the Payday Rule will now be the CFPB’s reopened rulemaking and the Texas lawsuit filed by two trade groups challenging the Payday Rule.  In its Spring 2018 rulemaking agenda, the CFPB indicated that it expects to issue a Notice of Proposed Rulemaking to revisit the Payday Rule in February 2019.

In the meanwhile, all eyes will be on the Texas lawsuit to see how the CFPB responds and, in particular, whether it will agree with most, if not all, of the plaintiffs’ allegations.  The CFPB must file its answer by June 11.

 

Two trade groups, the Consumer Financial Service Association of America, Ltd. and the Consumer Service Alliance of Texas, have filed a lawsuit against the CFPB in a Texas federal district court challenging the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule).  The plaintiffs seek an order and judgment holding the Payday Rule unlawful and enjoining and setting aside the Payday Rule.  The case has been assigned to Judge Lee Yeakel, who was nominated by President George W. Bush in 2003.

The lawsuit appears to be a third bite at the apple in that it represents a third possible route for overturning the Payday Rule.  More specifically, the filing appears to reflect industry concern about the viability of overturning the rule through a resolution under the Congressional Review Act (CRA) or the reopening of rulemaking by the CFPB.

The complaint alleges that the Payday Rule is unlawful for the following reasons:

  • The CFPB’s structure is unconstitutional because of the President’s inability to remove the CFPB Director other than for-cause and the funding of the CFPB outside of the normal appropriations process
  • The Consumer Financial Protection Act (CFPA) unconstitutionally delegates legislative power to the CFPB by granting it “legislative authority” to prescribe rules identifying as unlawful unfair, deceptive, or abusive acts or practices and not providing “an intelligible principle” that the CFPB must follow in exercising such authority
  • The Payday Rule exceeds the CFPB’s statutory authority for reasons that include:
    • The Final Rule’s identification of unfair and abusive lending practices conflicts with the CFPA limitations on the CFPB’s authority to declare an act or practice unfair or abusive
    • The Final Rule violates the CFPB prohibition on the CFPB’s establishment of a usury limit because it “determines the legal status of certain covered loans based solely on their interest rates”
    • The CFPB does not have the authority to impose an ability-to-repay requirement on the loans covered by the Payday Rule
  • The Payday Rule is arbitrary and capricious in violation of the Administrative Procedure Act (APA) because the CFPB’s unfairness and abusive determinations “are unsupported by substantial evidence and reflect a clear error in judgment”
  • The CFPB’s cost-benefit analysis of the Payday Rule does not satisfy the requirements of the CFPA for such an analysis
  • The CFPB failed to satisfy various procedural requirements in promulgating the Payday Rule including:
    • The APA notice and comment rulemaking process because “the history of the rulemaking demonstrates that the Bureau will not consider or evaluate empirical studies or evidence that diverges from the Bureau’s pre-determined decision that payday lending and title lending are harmful and must be burdened by draconian regulations”
    • The CFPB has “reduced the elaborate rulemaking process to little more than a sham” because it “has largely allowed outside groups opposed to payday lending to drive this rulemaking, and has not adequately disclosed its reliance on these groups”
    • The CFPB failed to adequately consider the Payday Rule’s impact on small businesses as required by SBREFA
    • The CFPB failed to give adequate consideration to the “over one million comments [it received] from consumers who opposed the proposed rule”

Resolutions under the Congressional Review Act (CRA) to override the Payday Rule have been introduced in the House and Senate.  In January 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider the Payday Rule pursuant to the APA.  The Payday Rule became “effective”on January 16, 2018.  However, the compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019.

It is doubtful that there are 51 votes in the Senate to pass a CRA resolution.  Adoption of a new rule through a reopened rulemaking could take too long to accomplish because of the many APA regulatory hoops that the CFPB would have to jump through.  In addition, consumer advocacy groups would likely file a lawsuit against the CFPB challenging any new rule.

Perhaps the most important question with respect to the Texas lawsuit is how the CFPB will respond.  The CFPB’s position under the Trump Administration on the constitutional issues is uncertain.  While President Trump wanted the CFPB to be held unconstitutional when Richard Cordray was Director so that he could be removed without cause, the President no longer needs such authority.  Moreover, the President might no longer want to have such authority because it would potentially enable a Democratic President to remove whoever President Trump eventually appoints as Director.

On the other hand, based on Mr. Mulvaney’s recent recommendation that the CFPA be amended to give the President more control over the Director, some observers believe that the CFPB would agree with the complaint’s allegation that the CFPB is unconstitutional.  In addition, Mr. Mulvaney’s decision to reopen the rulemaking indicates that he has grave concerns about the Payday Rule.

All in all, we believe that the CFPB will likely file an answer to the complaint stating that it agrees with most, if not all, of the complaint’s allegations.  Should that happen, the plaintiffs would be well-positioned to file a motion for judgment on the pleadings.

A motion for judgment on the pleadings is ordinarily granted when the complaint and answer, by themselves, reveal that there are no material issues of fact to be resolved and that a party is entitled to judgment as a matter of law.  However, it is unclear whether the court would be obligated to grant a motion by the plaintiffs for judgment on the pleadings or could exercise independent judgment about the legal issues raised in the lawsuit.

It also seems likely that certain consumer advocacy groups or Democratic state attorneys general will seek to intervene as defendants in order to defend the lawsuit.  The plaintiffs (and perhaps the CFPB) would likely oppose such intervention and it is premature at this point to speculate as to how the court would rule on intervention.

While it is also noteworthy that the lawsuit was filed in federal court in Texas rather than in D.C., the reason for the plaintiffs’ choice of Texas seems obvious—they needed to initiate the lawsuit in a federal circuit that has not already ruled on their constitutional challenge.  The D.C. Circuit has already concluded in PHH that the CFPB is constitutional.  The plaintiffs undoubtedly hope that the Fifth Circuit will decide the constitutional issue differently, thus creating a conflict with the D.C. Circuit that the U.S. Supreme Court would likely resolve.  Also, unlike the D.C. Circuit, the Fifth Circuit is known for being one of the more conservative circuits in the country

 

A group of Democratic senators (joined by two independent Senators) has sent a letter to Leandra English and Mick Mulvaney urging them to abandon any efforts by the CFPB to reconsider its final payday/auto title/high-rate installment loan rule (Payday Rule).

In January 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider the Payday Rule pursuant to the Administrative Procedure Act.  Although the Payday Rule became “effective” on January 16, 2018, the compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019.  The Senators state that they “understand that the CFPB is delaying the rule by granting waivers to companies who would otherwise be taking steps to begin complying with the rule, and that the Bureau may be offering the payday loan industry an opportunity to undermine the rule entirely.”  According to the Senators, such actions are “further efforts to undermine the implementation of this important consumer protection rule.”

The Senators also state that they are “troubled by the CFPB’s enforcement actions related to payday lending.”  Their letter references the CFPB’s decision to end a lengthy investigation into a payday lending company and its dismissal of a federal court lawsuit filed by the CFPB against four online tribal lenders.

We previously observed that the lawsuit represented another attempt by the CFPB to transform alleged violations of state law into CFPA UDAAP violations.  More specifically, the CFPB claimed that because the lenders charged interest at rates that exceeded state usury limits and/or failed to obtain required state licenses, the loans were void or uncollectible in whole or in part as a matter of state law and the defendants’ efforts to collect amounts that consumers did not owe under state law were “unfair,” “deceptive,” and “abusive” under the CFPA as a matter of federal law.

 

The American Banker has reported that last week, Senator Lindsey Graham introduced a joint resolution under the Congressional Review Act (CRA) to override the CFPB’s final payday/auto title/high-rate installment loan rule (Payday Rule).  The CRA is the vehicle used by Congress to overturn the CFPB’s arbitration rule in a party-line vote.

In December 2017, a bipartisan joint CRA resolution to override the Payday Rule was introduced in the House and, in January 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider the Payday Rule pursuant to the Administrative Procedure Act (APA).

To be eligible for the special Senate procedure that allows a CRA resolution to be passed with only a simple majority, the Senate must act on the resolution during a period of 60 “session days” which begins on the later of the date when the rule is received by Congress and the date it is published in the Federal Register.  While the deadline for voting on a CRA resolution cannot be definitively determined in advance because of uncertainty as to which days going forward will count as “session days,” it appears the deadline will occur by mid-May.

As we previously commented, to change the Payday Rule pursuant to the APA, the CFPB will have to follow the APA’s time-consuming notice and comment procedures.  In addition, since any changes made by the CFPB are likely to be challenged in litigation, the CFPB will need to successfully defend a revised rule or its withdrawal of the existing rule.

Given the hurdles created by the rulemaking process, the CRA provides a “cleaner” and quicker vehicle for overturning the final rule.  However, there is no assurance that the majorities needed to override the Payday Rule under the CRA can be assembled in both the House and the Senate.  Since the Senate passed the CRA resolution overturning the arbitration rule, the Republican’s majority has narrowed to 51-49, and Senator John McCain has been absent from Congress for health reasons.

According to Politico, CFPB Acting Director Mick Mulvaney will testify before the House Financial Services Committee on April 11, 2018.  Undoubtedly, he will be asked about the CFPB’s plans to revisit the Payday Rule.

 

The CFPB announced today that it intends to engage in a rulemaking process to reconsider, pursuant to the Administrative Procedure Act, its final rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans (the “Payday Rule”).  The announcement fully accords with our expectation that the Payday Rule will never see the light of day in its current form.

If it were to go into effect, the Payday Rule would largely eliminate the availability of payday loans to the public.  In this regard, the Payday Rule reflected former CFPB Director Cordray’s hostility to payday lending and his failure to seriously consider how consumers who rely upon the product would be impacted by its elimination.  It was adopted on a crash basis shortly before Director Cordray’s resignation and largely disregarded over 1,000,000 comments from consumers articulating the critical benefits of payday loans.

To our mind, it was inevitable that Director Cordray’s successor would wish to re-evaluate the costs and benefits of the Payday Rule.  We think it highly likely that, at the end of the day, the new Director (whether Mick Mulvaney in an acting capacity or the as-yet-to-be-appointed permanent successor to former Director Cordray) will repeal the Payday Rule while he or she considers other options that can preserve the product and limit the potential for consumer injury.

Today’s announcement is good news for the millions of consumers who rely upon payday and title loans to meet their financial needs (and, of course, to the payday and title lending industries).

A bipartisan group of lawmakers has introduced a joint resolution under the Congressional Review Act to override the CFPB’s final payday/auto title/high-rate installment loan rule.  House members sponsoring the bill consist of three Democrats and three Republicans.  The CRA is the vehicle used by Congress to overturn the CFPB’s arbitration rule.

The CFPB’s final payday loan rule was published in the Federal Register on November 17.  The regulation is effective January 16, 2018. The compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019.  The deadline to submit an application for preliminary approval to be a registered information system is April 16, 2018.

To be eligible for the special Senate procedure that allows a CRA disapproval resolution to be passed with only a simple majority, the Senate must act on the resolution during a period of 60 “session days” which begins on the later of the date when the rule is received by Congress and the date it is published in the Federal Register.  For purposes of the CRA, a rule is considered to have been “received by Congress” on the later of the date it is received in the Office of the Speaker of the House and the date of its referral to the appropriate Senate committee.  The payday loan rule was received by the Speaker of the House on November 13 and referred to the Senate Banking Committee on November 15.  (Due to uncertainty as to which days going forward will count as “session days,” the deadline for voting on a CRA resolution cannot be definitively determined in advance.)

In addition to the CRA resolution, we expect an industry lawsuit challenging the rule to  be filed within the next few weeks.  According to media reports, the lawsuit is expected to be filed by the Community Financial Services Association of America.  Also, Mick Mulvaney, President Trump’s designee as CFPB Acting Director, is reported to be reviewing the payday loan rule as well as other CFPB actions to determine what his next steps will be.

The CFPB’s final payday loan rule was published in today’s Federal Register.  Lenders covered by the rule include nonbank entities as well as banks and credit unions.  In addition to payday loans, the rule covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans.  For a summary of the rule, see our legal alert.

Since the rule’s effective and compliance dates are tied to the Federal Register publication date, those dates have now been set. The regulation is effective January 16, 2018.  The compliance date for the rule’s substantive requirements and limits (Sections 1041.2 through 1041.10), compliance program/documentation requirements (Section 1041.12), and prohibition against evasion (Section 1041.13) is August 19, 2019.  The deadline to submit an application for preliminary approval to be a registered information system is April 16, 2018.

We expect the rule’s publication to trigger the filing of an industry lawsuit challenging the rule within a matter of weeks.  In addition, the rule could become the subject of a resolution of disapproval under the Congressional Review Act (CRA), the vehicle used by Congress to overturn the CFPB’s arbitration rule.

Under the CRA, the receipt of a final rule by Congress begins a period of 60 days during which a member of either chamber can introduce a joint resolution of disapproval.  In calculating the 60 days, every calendar day is counted, including weekends and holiday, with the count paused only for periods when either chamber (or both) is gone for more than three days (i.e. pursuant to an adjournment resolution).

For purposes of the CRA, a rule is considered to have been “received by Congress” on the later of the date it is received in the Office of the Speaker of the House and the date of its referral to the appropriate Senate committee.  The payday loan rule was received by the Speaker of the House on November 13 and referred to the Senate Banking Committee on November 15.

To be eligible for the special Senate procedure that allows a CRA disapproval resolution to be passed with only a simple majority, the Senate must act on the resolution during a period of 60 session days which begins on the later of the date when the rule is received by Congress and the date it is published in the Federal Register.

The final payday loan rule’s publication in the Federal Register is also a trigger for the filing of a petition with the Federal Stability Oversight Council (FSOC) to set aside the rule. The Dodd-Frank Act provides that such a petition must be filed “not later than 10 days” after a regulation has been published in the Federal Register.  Efforts to use the FSOC mechanism to overturn the arbitration rule did not materialize.

The CFPB issued its final payday loan rule yesterday in a release running 1,690 pages.  Lenders covered by the rule include nonbank entities as well as banks and credit unions. In addition to payday loans, the rule covers auto title loans, deposit advance products, and certain high-rate installment and open-end loans.  The final rule becomes effective 21 months after publication in the Federal Register (except for certain provisions necessary to implement the rule’s consumer reporting requirements, which become effective 60 days after the rule’s publication).

On November 9, 2017, from 12 p.m. to 1 p.m. ET, we will hold a webinar, “First Takes on the CFPB Small Dollar Rule: What It Means for You.”  The webinar registration form is available here.

The final rule establishes limitations for a “covered loan,” which can be either (1) any short-term consumer credit with a term of 45 days or less, (2) any longer-term balloon-payment consumer credit, or (3) longer-term consumer credit with a term of more than 45 days and without a balloon payment where (i) the total cost of credit exceeds an annual rate of 36%, and (ii) the lender obtains a form of “leveraged payment mechanism” giving the lender a right to initiate transfers from the consumer’s account.

Among the changes from the CFPB’s proposal: vehicle security is no longer relevant to whether longer-term credit is a “covered loan” and a “leveraged payment mechanism” no longer includes payments obtained through a payroll deduction or other direct access to the consumer’s paycheck.

The final rule excludes from coverage (1) purchase-money credit secured by the car or other consumer goods purchased, (2) real property or dwelling-secured credit if the lien is recorded or perfected, (3) credit cards, (4) student loans, (5) non-recourse pawn loans, (6) overdraft services and overdraft lines of credit, (7) alternative loans that meet conditions similar to those applicable to loans made under the NCUA’s Payday Alternative Loan Program, and (8) subject to certain conditions, employer wage advance programs, no cost-advances, and accommodation loans.

The final rule contains an “ability to repay” requirement for covered short-term credit and longer-term balloon payment credit but provides an alternative.  A lender must choose between:

  • A “full payment test,” under which the lender must make a reasonable determination of the consumer’s ability to repay the loan and cover major financial obligations and living expenses over the term of the loan and the succeeding 30 days.  Under this test, the lender must take account of the consumer’s basic living expenses and obtain and verify evidence of the consumer’s income and major financial obligations  Unlike the proposed rule, the final rule does not require income verification in all instances.  In circumstances where a lender determines that a reliable income record is not reasonably available, such as when a consumer receives some income in cash and spends that money in cash, the lender can reasonably rely on the consumer’s statements alone as evidence of income.  Further new liberality allows a lender to verify housing expenses other than a payment for a debt obligation that appears on a national consumer report by reasonably relying on the consumer’s written statement.  The final rule does not include the proposal’s presumptions of unaffordability.  Among other changes from the proposal, the final rule permits lenders and consumers to rely on income from third parties, such as spouses, to which the consumer has a reasonable expectation of access as part of the ability to repay determination and permits lenders in certain circumstances to consider whether another person is regularly contributing to the payment of major financial obligations or basic living expenses.  A 30-day cooling off period applies after a sequence of three covered short-term or longer-term balloon payment loans.
  • A “principal-payoff option,” under which the lender can make up to three sequential loans in which the first has a principal amount up to $500, the second has a principal amount that is at least one-third smaller than the principal amount of the first, and the third has a principal amount that is at least two-thirds smaller than the principal amount of the first.  A lender could not use this option if (1) the consumer had in the past 30 days an outstanding covered short-term loan or an outstanding longer-term balloon payment loan, and (2) the new loan would result in the consumer having more than six covered short-term loans during a consecutive 12-month period or being in debt for more than 90 days on covered short-term loans during a consecutive 12-month period.  When using this option, the lender cannot take vehicle security or structure the loan as open-end credit.

In a major change from the proposal, the final rule does not include an underwriting requirement for covered longer-term credit without a balloon payment.  Instead, for such credit, lenders are subject only to the final rule’s “penalty fee prevention” provisions, which apply to all covered loans.  Under these provisions:

  • If two consecutive attempts to collect money from a consumer’s account made through any channel are returned for insufficient funds, the lender cannot make any further attempts to collect from the account unless the consumer has provided a new and specific authorization for additional payment transfers.  The final rule contains specific requirements and conditions for the authorization.
  • A lender generally must give the consumer at least three business days advance notice before attempting to collect payment by accessing a consumer’s checking, savings, or prepaid account.  The notice must include information such as the date of the payment request, payment channel, payment amount (broken down by principal, interest, fees, and other charges), and additional information “unusual attempts,” such as when the payment is for a different amount than the regular payment or initiated on a date other than the date of a regularly scheduled payment.

The final rule also requires the CFPB’s registration of consumer reporting agencies as “registered information systems” to whom lenders must furnish information about covered short-term and longer-term balloon payment credit and from whom lenders must obtain consumer reports for use in extending such credit.  If there is no registered information system or if no registered information system has been registered for at least 180 days of the final rule’s 21-month effective date, lenders will be unable to use the “principal-payoff” option.  The CFPB expects that there will be at least one registered information system by the effective date.

 

On September 5, 2017, the CFPB entered into a consent order with Zero Parallel, LLC (“Zero Parallel”), an online lead aggregator based in Glendale, California. At the same time, it submitted a proposed order in the U.S. District Court for the Central District of California, where it is litigating with Zero Parallel’s CEO, Davit Gasparyan. Zero Parallel and Gasparyan agreed to pay a total of $350,000 in civil money penalties to settle claims brought by the CFPB.

In the two actions, the CFPB claimed that Zero Parallel, with Gasparyan’s substantial assistance, helped provide loans to consumers which would be void under the laws of the states in which the consumers lived. Zero Parallel allegedly facilitated the loans by acting as a lead aggregator. In that role, Zero Parallel collected information that consumers entered into various websites indicating that they were interested in taking out payday or installment loans. Zero Parallel then transmitted consumers’ information to various online lenders which evaluated the consumers’ information. The lenders then decided whether they wished to make the loans. If they did, the lenders purchased the leads from Zero Parallel and interacted directly with consumers to complete the loan transactions. (More on the lead generation process in our previous blog postings.)

In some cases, the lenders who purchased the leads offered loans on terms that were prohibited in the states where the consumers resided. The CFPB claims that such loans were therefore void. Because Zero Parallel allegedly knew that the leads it sold were likely to result in void loans, the CFPB alleged that Zero Parallel engaged in abusive acts and practices. Under the consent order, and the proposed order, if it is entered, Zero Parallel will be prohibited from selling leads that would facilitate such loans. To prevent this from happening, the orders require Zero Parallel to take reasonable steps to filter the leads it receives so as to steer consumers away from these allegedly void loans.

The CFPB also faulted Zero Parallel for failing to ensure that consumers were adequately informed about the lead generation process. This allegedly caused consumers to get bad deals on the loans they took out.

Consistent with our earlier blog posts about regulatory interest in lead generation, we see two takeaways from the Zero Parallel case.  First, the CFPB remains willing to hold service providers liable for the alleged bad acts of financial services companies to which they provide services. This requires service providers to engage in “reverse vendor oversight” to protect themselves from claims like the ones the CFPB made here.  Second, the issue of disclosure on websites used to generate leads remains a topic of heightened regulatory interest. Financial institutions and lead generators alike should remain focused such disclosures.

The CFPB’s Spring 2017 rulemaking agenda has been published as part of the Spring 2017 Unified Agenda of Federal Regulatory and Deregulatory Actions.  The preamble indicates that the information in the agenda is current as of April 1, 2017.  Accordingly, the agenda does not reflect the issuance of the CFPB’s final arbitration rule on July 10 or other rulemaking actions taken since April 1 such as the proposed changes to the CFPB’s prepaid account rule and various recent mortgage-related developments.  In addition, the agenda and timetables are likely to be significantly impacted should Director Cordray leave the CFPB this fall to run for Ohio governor as has been widely speculated.

The agenda sets the following timetables for key rulemaking initiatives:

Payday, title, and deposit advance loans.  The CFPB released its proposed rule on payday, title, and high-cost installment loans in June 2016 and the comment period ended on October 22, 2016.  The Spring 2017 agenda gives a June 2017 date for completing the initial review of comments (which the CFPB states in the preamble numbered more than one million) but does not give an estimated date for a final rule.  There has been considerable speculation that a final rule will be issued by the end of next month.

Debt collection.  In November 2013, the CFPB issued an Advance Notice of Proposed Rulemaking concerning debt collection.  In July 2016, it issued an outline of the proposals it is considering in anticipation of convening a SBREFA panel.  The coverage of the CFPB’s SBREFA proposals was limited to “debt collectors” that are subject to the FDCPA.  When it issued the proposals, the CFPB indicated that it expected to convene a second SBREFA panel in the “next several months” to address a separate rulemaking for creditors and others engaged in debt collection not covered by the proposals.  However, Director Cordray announced last month that the CFPB has decided to proceed first with a proposed rule on disclosures and treatment of consumers by debt collectors and thereafter write a market-wide rule in which it will consolidate  the issues of “right consumer, right amount” into a separate rule that will cover first- and third-party collections.

In the Spring 2017 agenda, the CFPB gives a September 2017 date for a proposed rule.  Presumably, that date is for a proposal that will deal with disclosures and treatment of consumers by debt collectors.  The new agenda gives no estimated dates for the convening of a second SBREFA panel or a proposed second rule.  In the preamble to the new agenda, the CFPB states only that it “has now decided to issue a proposed rule later in 2017 concerning FDCPA collectors’ communications practices and consumer disclosures.  The Bureau intends to follow up separately at a later time about concerns regarding information flows between creditors and FDCPA collectors and about potential rules to govern creditors that collect their own debts.”

Larger participants.  The CFPB states in the Spring 2017 agenda that it “expects to conduct a rulemaking to define larger participants in the markets for consumer installment loans and vehicle title loans for purposes of supervision.”  It also repeats the statement made in previous agendas that the CFPB is “also considering whether rules to require registration of these or other non-depository lenders would facilitate supervision, as has been suggested to the Bureau by both consumer advocates and industry groups.”  (Pursuant to Dodd-Frank Section 1022, the CFPB is authorized to “prescribe rules regarding registration requirements applicable to a covered person, other than an insured depository institution, insured credit union, or related person.”)  The new agenda estimates a June 2017 date for prerule activities and a September 2017 date for a proposed rule.

Overdrafts.  The CFPB issued a June 2013 white paper and a July 2014 report on checking account overdraft services.  In the Spring 2017 agenda, as it did in its Fall 2015 agenda and Fall and Spring 2016 agendas, the CFPB states that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the opt-in process.”  Although the Fall 2016 agenda estimated a January 2017 date for further prerule activities, the new agenda moves that date to June 2017.  As we have previously noted, the extended timeline may reflect that the CFPB feels less urgency to promulgate a rule prohibiting the use of a high-to-low dollar amount order to process electronic debits because most of the banks subject to its supervisory jurisdiction have already changed their processing order.

Small business lending data.  Dodd-Frank 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 new agenda estimates a June 2017 date for prerule activities.  The CFPB repeats the statement made in the Fall 2016 agenda that it “is focusing on outreach and research to develop its understanding of the players, products, and practices in business lending markets and of the potential ways to implement section 1071.  The CFPB then expects to begin developing proposed regulations concerning the data to be collected and determining the appropriate procedures and privacy protections needed for information-gathering and public disclosure under this section.”

Mortgage rules.  Earlier this month, the CFPB issued a proposed rule dealing with a lender’s use of a Closing Disclosure to determine if an estimated charge was disclosed in good faith.  The Spring 2017 agenda gives a March 2018 estimated date for issuance of a final rule.  This past March, the CFPB issued a proposal to amend Regulation B requirements relating to the collection of consumer ethnicity and race information to resolve the differences between Regulation B and revised Regulation C.  The Spring 2017 agenda gives an October 2017 estimated date for a final rule.