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With a new administration incoming at the Consumer Financial Protection Bureau (CFPB) and the country turning the corner in its fight against the pandemic, the CFPB has begun to flex its regulatory muscles once again. From ensuring LGBTQ- and COVID-19-related protections to rescinding or delaying the implementation of Trump Administration-era rules and policy statements, the CFPB has been very active in recent weeks reasserting itself.
Protections for Disadvantaged Populations
Since its inception, the CFPB has promoted the rights and protections of disadvantaged populations through the release of policy statements and rules, as well as its enforcement of regulations like the Equal Credit Opportunity Act and Regulation B. In the past few weeks, the Bureau has taken robust action to enhance such protections.
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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs, and webinars with more analysis in these areas. We understand that keeping on top of the rapidly evolving regulatory landscape is more important than ever for businesses seeking to offer new and ground-breaking technologies.
Regulatory Announcements
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Rescission of Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic. The CFPB issued a
Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic (March 26, 2020). That statement is rescinded as of April 1, 2020, and in the rescission document, the CFPB announces its intent to exercise its supervisory and enforcement authority consistent with the Dodd-Frank Act and with the full authority afforded by Congress consistent with the Bureau’s statutory purpose and objectives.
The rescission document notes that the rescinded statement recognized the impact of the COVID-19 pandemic on the operations of many financial institutions, including staffing and related resource challenges. The CFPB states, however, that it has concluded that circumstances have since changed, and that financial institutions and other entities have adjusted their operations, including developing more ro
On April 1, 2021, the CFPB issued
Compliance Bulletin 2021-02 (the “Bulletin”), warning mortgage servicers to “take all necessary steps now to prevent a wave of avoidable foreclosures this fall.” The Bulletin and
associated press release cite industry data suggesting that around 1.7 million borrowers will exit COVID-related forbearances in September 2021 and the following months, many of whom will be a year or more behind on mortgage payments. With federal foreclosure moratoriums expiring at the end of June 2021, the CFPB warns that servicers will need ramped-up capacity to reach out and respond to the large number of homeowners who will need loss mitigation assistance.
REGULATORY DEVELOPMENTS
CFPB Warns Mortgage Servicers to Prepare Now for Anticipated Surge of Homeowners Needing Assistance
On March 31, the CFPB issued Compliance Bulletin 2021-02, promising accountability for servicers who fail to put struggling families first and asking them to prepare now to deal with the foreseeable surge of borrowers in need of loss mitigation assistance when the pandemic-related federal emergency mortgage protections expire in June. The CFPB communicated that it will be monitoring how mortgage servicers engage with borrowers, respond to borrower requests, and process applications for loss mitigation to prevent avoidable foreclosures, expecting servicers to:
Contact borrowers in forbearance before the end of the forbearance period so they have time to apply for help;