CFPB Statements Provide Temporary Flexibility To Financial Institutions In Light Of COVID-19

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On March 26, 2020, the Consumer Financial Protection Bureau (CFPB or the “Bureau”) announced that it is taking steps to temporarily assist financial institutions in meeting customer needs as a result of COVID-19. The CFPB stated that it is postponing certain required industry data collections to allow companies to focus on supporting consumers in need, and changing its supervisory activities to take into consideration operational challenges at regulated entities.

Suspension of Data Collections

The CFPB issued two policy statements delaying, as of March 26, 2020 and until further notice, data collections regarding: (i) credit card accounts and prepaid accounts and (ii) mortgages. In the policy statements, the Bureau addressed information submissions that are required by law, indicating that it does not intend to cite in an examination, or initiate an enforcement action against any entity for, failure to submit the information when required. The CFPB said it will notify regulated entities in the future regarding when and how to submit information under these requirements, and will include guidance regarding submissions that would have been made but for the policy statements. The CFPB emphasized that regulated entities should maintain records to allow them to make delayed submissions and added that entities may continue making the otherwise required submissions if they choose to do so.

Credit Card and Prepaid Accounts. The CFPB said in its Statement on Supervisory and Enforcement Practices Regarding Bureau Information Collections for Credit Card and Prepaid Account Issuers that it will not expect reporting of certain required information related to credit card accounts and prepaid accounts under the Truth in Lending Act and Regulations Z and E. This information includes:

  • Annual submission of certain information concerning agreements between credit card issuers and institutions of higher education;
  • Quarterly submission of consumer credit card agreements;
  • Collection of certain credit card price and availability information from a sample of credit card issuers; and
  • Submission of prepaid account agreements and related information.

Mortgages. In its Statement on Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act, the CFPB said that it will not expect the quarterly information reporting by certain mortgage lenders that is required under the Home Mortgage Disclosure Act and Regulation C.

Section 1071. The CFPB is also postponing a survey of financial institutions that seeks information on the cost of compliance in connection with the pending rulemaking on Section 1071 of the Dodd-Frank Act. Section 1071 amended the Equal Credit Opportunity Act to direct the CFPB to require financial institutions to collect and report data on lending to small businesses, with a goal of better understanding the landscape for businesses owned and operated by women and minorities.

Changes in Supervisory Activities

In its Statement on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic, the Bureau acknowledged the impact of COVID-19 on the operations of many financial institutions and announced that it will work with affected financial institutions to schedule examinations and other supervisory activities to “minimize disruption and burden.” In addition, the Bureau said that enforcement activities will take into account current staffing and related resource challenges confronting financial institutions and their counsel. The CFPB stated its encouragement of good-faith efforts by financial institutions to meet the needs of borrowers and other customers during the pandemic. The Bureau said that in conducting examinations and other supervisory activities and determining whether to take enforcement action, it will consider the circumstances that entities may face as a result of COVID-19 and “will be sensitive to good-faith efforts demonstrably designed to assist consumers.”

CFPB Director Kathy Kraninger said that the CFPB “will continue to issue additional guidance and policies to facilitate the ongoing collaborative relationship between companies and their customers during this time.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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