The CFPB plans to stop the implementation of quality management and debt collection rules


The Consumer Financial Protection Bureau is seeking to delay implementation dates for rules on qualified mortgages and debt collection and will resume data collection on home loans, credit cards and prepaid cards.

CFPB Acting Director Dave Uejio wrote in a blog post on Wednesday evening that CFPB needed more time to review the rules that were implemented – but have not yet come into effect – under the Trump administration.

“I will assess regulatory actions taken by previous management and adjust as necessary and appropriate those that are not in line with our consumer protection mission and mandate,” Uejio wrote, adding that the changes include ways to “explore options to preserve the status quo with respect to the rules of quality management and debt collection.

In June, the CFPB extended the quality management rule until April 2021, once again delaying the exemption from the strict underwriting guidelines granted to Fannie Mae and Freddie Mac during the last financial crisis. The changes come as no surprise. Many expected President Biden’s CFPB to delay the effective dates of several rules started under former CFPB director Kathy Kraninger, including two recent debt collection rules finalized in October and December.

Debt collection rules would for the first time limit the frequency with which debt collectors can call borrowers, to seven calls per week, and require debt collectors to provide detailed information on old debts that are overdue. prescription.

To help consumers and military veterans suffering financially from the coronavirus pandemic, Uejio also asked the office’s research division to resume collecting data from the Home Mortgage Disclosure Act that suspended Kraninger in March. The CFPB originally required quarterly HMDA reports to understand when markets are under pressure or in motion and some experts saw the suspension of quarterly data collection as a mistake.

The CFPB said it will also resume data collection for credit cards, small business loans and clean energy to better understand who receives credit and assess the situation of borrowers during the pandemic.

Uejio has made it clear that he is moving quickly to implement changes even before Rohit Chopra, President Biden’s candidate for the agency’s head, was confirmed. Chopra, Commissioner of the Federal Trade Commission, has also expressed interest in small business access to credit.

“I want to make sure we’re doing everything we can for small businesses across the country that are on the brink of extinction,” Uejio wrote. “The Bureau enforces essential laws that protect small business owners, including harmful discrimination, in their access and use of credit. “

Lucy Morris, a partner at Hudson Cook and former deputy director of enforcement at CFPB, said she “wouldn’t be surprised to see broad and creative approaches to small business lending that could push the boundaries of government authority. office”.

The Democrat-controlled CFPB should use all of its tools – enforcement, oversight, and market surveillance – to help consumers. The Dodd-Frank Act gave the CFPB the power to oversee financial markets for risk by gathering information and performing research.

The CFPB may also require financial companies to file annual or special reports or to respond in writing to specific questions. He is currently analyzing several issues related to the pandemic, including foreclosures, repossessions of mobile homes and landlord-tenant evictions, although it is not clear whether landlord issues fall under the authority of the CFPB.

“Our agency is now facing a test of whether we can, using all the tools Dodd-Frank has given us, prevent other similar economic and social disasters,” Uejio wrote. “In doing so, we need to focus more on the consumer experience. As a nation, we were too late and too slow to respond to the warning signs of the mortgage market just over a decade ago. “

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