House Republican lawmakers this week slammed recent changes made by the CFPB to its supervision examination manual for unfair or deceptive acts and practices and its rules of practice and procedure regarding administrative adjudication procedures, noting that these actions “deviate significantly from past practices” and were taken outside of the notice and comment process.
The Consumer Financial Protection Bureau today said it would invoke a “largely unused” authority under the Dodd-Frank Act to directly examine nonbank financial services providers. “Given the rapid growth of consumer offerings by nonbanks, the CFPB is now utilizing a dormant authority to hold nonbanks to the same standards that banks are held to,” said CFPB Director Rohit Chopra.
The CFPB today signaled its intention to ramp up supervision activity around fair lending laws and unfair, deceptive and abusive acts and practices.
In a compliance bulletin issued today, the CFPB signaled that it will hold auto loan holders and servicers “accountable for [unfair, deceptive or abusive acts and practices] related to the repossession of consumers’ vehicles.”
Ensuring your compliance team is ready for what is ahead begins with confronting a set of challenges in these key areas.
“We think the new administration will be aggressive and, quite frankly, willing to press the boundaries, since they can’t really know the limits of their authority unless they test it.”
In his first appearance before the House Financial Services Committee today, CFPB Director Rohit Chopra told lawmakers that although he agreed with Acting Director David Uejio’s decision to rescind a policy statement on “abusive” conduct issued by former Director Kathy Kraninger, he has “huge aspirations to create durable jurisprudence” regarding the definition of “abusive” in the Dodd-Frank Act.
A quarter into the year, a quick check on how key areas are changing, with some important suggestions.
The Consumer Financial Protection Bureau today rescinded a January 2020 policy statement that clarified the bureau’s approach to citing and challenging “abusive” conduct in supervision or enforcement actions.
In light of the challenges throughout 2020, a high compliance priority will be ensuring that your interactions with your borrowers are above reproach.