With the CFPB under a court order to complete the Dodd-Frank Act Section 1071 rulemaking by March 31, CFPB Director Rohit Chopra today acknowledged concerns raised by ABA and others that the rule could have an outsized effect on smaller institutions and could affect the supply of credit to the nation’s small businesses. The rulemaking addresses the collection of credit application data for small businesses, including women-owned and minority-owned small businesses.
“We want to make sure we have an implementation period that gives the smaller firms more time, and the ability to make sure it’s not duplicative with existing requirements under the Community Reinvestment Act,” Chopra told the House Financial Services Committee during a CFPB oversight hearing. He added that “we’re going to get it done by March,” and “we’re going to do the best we can, but the statute is what we have to look to.”
During the hearing, lawmakers also took Chopra to task over his agency’s creation and persistent use of the term “junk fees” to describe, among other things, legal fees that banks charge for financial products and services. “There is no such word in financial services lexicon,” said Rep. Blaine Luetkemeyer (R-Mo.). “You’re making up a word and then using it to go out and enforce something that doesn’t exist.”
Lawmakers also raised concerns over the bureau’s recent updates to its unfair, deceptive, or abusive acts and practices (or UDAAP) exam manual that expanded the definition of “unfairness” to encompass discrimination—an action that ABA has challenged in court. “This is not interpretive guidance,” Rep. Andy Barr (R-Ky.) told Chopra. “You’re trying to change the law.”