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CFPB Issues Regulatory Agenda: Brace for the New Rules and the SBREFA Process

Tuesday, January 31, 2012

The lingering question on everyone’s mind since Richard Cordray was appointed director of the Consumer Financial Protection Bureau (CFPB or Bureau) has been: When will the Bureau begin to issue new regulations that were not carryovers from the Fed? That question is a little closer to being answered with the Bureau’s publication of its long overdue Regulatory Agenda on January 20, 2012. Originally due in October 2011, the Regulatory Agenda is required to be published by each federal agency twice a year to give the public notice of expected regulatory activities during the upcoming six months. While it does not preclude the CFPB from issuing other regulations during this period, it is a helpful way to keep track of upcoming agency regulatory activity. Given the broad mandate given to the Bureau, the rulemaking process has been a subject of great interest.

Although precise dates are still not set, the Bureau’s Regulatory Agenda sheds much more light on the sequence the Bureau will follow in rolling out numerous rules to regulate both depository and nondepository institutions such as mortgage lenders, payday loan companies, student loan providers, and others. The table below shows the upcoming rules, with a summary of what they will cover, and expected action dates. Under the Small Business Regulatory Enforcement and Fairness Act (SBREFA), the Bureau must determine if it will need to convene panels (SBREFA panels) that include small-entity representatives when a rule is likely to have a significant impact on a substantial number of small entities (SISNOSE).)¹

Title	Stage of Rulemaking	Date of Expected Action	Summary of Rulemaking
Supervision of Larger Depository Institutions and Affiliates²	Prerule	September 2012	Develop proposed regulations to clarify certain provisions regarding supervision of larger depository institutions and coordination between CFPB and the prudential regulators under Dodd-Frank § § 1025 and 1026.
Business Lending Data (Regulation B)	Prerule	October 2012	Develop proposed regulations for the collection and maintenance of data concerning credit applications made by women- or minority-owned businesses and small businesses as required by Dodd-Frank § 1071.
Home Mortgage Disclosure Act (Regulation C)	Prerule	October 2012	Develop proposed regulations concerning the expanded responsibilities of certain lenders imposed by Dodd-Frank § 1094 to report information in connection with applications they receive for mortgage and other housing-related loans under HMDA, including data to be collected and appropriate procedures, information safeguards, and privacy protection for information-gathering.
Supervision of Certain Nondepository Covered Persons	Proposed Rule Final Rule	March 2012, July 2012	Issue notice of proposed rulemaking that will establish the scope of CFPB’s non-depository supervision program by defining who is a larger participant in certain markets for consumer financial products or services and creating procedures to bring certain covered persons posing risks to consumers under the program’s scope in accordance with Dodd-Frank § 1024.
Alternative Mortgage Transaction Parity (Regulation D)	Proposed Rule	July 2012	Propose rule to clarify the circumstances under which state housing creditors may make alternative mortgage transactions pursuant to AMPTA in states that prohibit such transactions and will serve as a temporary measure pending the CFPB’s promulgation of permanent rules under Dodd-Frank § 1083.
Registration of Certain Nondepository Covered Persons	Proposed Rule	March 2012	Propose rule that would require certain nondepository covered persons to register with the CFPB under Dodd-Frank §§ 1022 and 1024(b)(7).
Disclosure Rules and Substantive Protection for Certain High-Cost Mortgage Loans (Regulation Z)²	Proposed Rule	July 2012	Propose rule to implement amendments made by subtitle C of title XIV of Dodd-Frank to TILA, specifically the high-cost mortgage provisions added to TILA by HOEPA that were expanded by Dodd-Frank.
Mortgage Originator Standards (Regulation Z)²	Proposed Rule	July 2012	Propose rule to implement amendments made by subtitle A of title XIV of Dodd-Frank to TILA and Regulation Z’s loan originator compensation standards, including clarification of the use of the unique identifier, payment of discount points and origination points, and anti-steering rules.
Mortgage Servicing (Regulation X; Regulation Z)²	Proposed Rule	July 2012	Propose rule to implement amendments under subtitles B and E of title XIV of Dodd-Frank to TILA and RESPA, including requiring consumers to receive periodic statement disclosures regarding their mortgage loans and imposing various requirements regarding the imposition and cancellation of force-placed hazard insurance, handling of payoff amount requests, and other topics related to mortgage servicing.
TILA/RESPA Mortgage Disclosure Integration (Regulation X; Regulation Z)²	Proposed Rule	July 2012	Propose rule and publish model mortgage disclosure forms that will integrate the disclosure requirements of RESPA and TILA by amending and integrating portions of Regulation Z (TILA) and Regulation X (RESPA).
Disclosure of Records and Information	Final Rule	December 2011 (not yet issued)	Adopt procedures for the public to obtain information from the CFPB under FOIA, the Privacy Act of 1974, and in legal proceedings.
State Official Notification Rules	Final Rule	December 2011 (not yet issued)	Adopt State Official Notification Rules pursuant to Dodd-Frank § 1042(b) and (c) that will govern the process by which state officials notify the CFPB of actions or proceedings undertaken under § 1042(a).
Rules Relating to Investigations	Final Rule	December 2011 (not yet issued)	Adopt Rules Relating to Investigations that will include procedures for investigating whether persons have engaged in conduct that violates federal consumer protection laws enforced by the CFPB.
Rules of Practice for Adjudication Proceedings	Final Rule	December 2011 (not yet issued)	Adopt Rules of Practice for Adjudication Proceedings that will implement Dodd-Frank § 1053 that authorizes the CFPB to conduct adjudication proceedings to ensure or enforce compliance with federal consumer protections administered by the CFPB.
Restatement of Federal Consumer Financial Law Regulations	Final Rule	December 2011 (issued)	Issued series of interim final rules recodifying existing regulations implementing federal consumer financial laws that will make no substantive changes to the existing regulations, but rather make nomenclature, technical, and other conforming changes required by Dodd-Frank.
Amendments to TILA and FIRREA Concerning Appraisals	Final Rule	October 2012	Issue final rule that will implement the amendments made by Dodd-Frank to TILA and FIRREA concerning appraisals.
Disclosure Rules for Remittance Transactions (Regulation E)²	Final Rule	January 2012	Issued final rule that will implement Dodd-Frank § 1073, which added new § 919 to EFTA.
Requirements for Escrow Accounts (Regulation Z)	Final Rule	September 2012	Issue final rule to implement Dodd-Frank amendments to TILA that lengthen the time that a mandatory escrow account established for a higher-priced loan must be maintained and impose disclosure requirements regarding escrow accounts.
TILA Ability to Repay (Regulation Z)	Final Rule	April 2012	Issue final rule amending Regulation Z that would implement amendments to TILA made by Dodd-Frank that expand the scope of the ability-to-repay requirement to cover any consumer credit transaction secured by a dwelling, establish standards for complying with the ability-to-repay requirement, and implement limits on prepayment penalties.

Pepper Points: The Bureau will be issuing at least 14 rules for public comments between now and October, 2012. Many of those rules will no doubt require that a SBREFA panel be convened. This will place a great burden on the Office of Advocacy which, along with OMB’s Office of Information and Regulatory Analysis, are required to participate in the SBREFA panel process. Typically, these panels take from two to nine months from start to finish, even though the statute requires the panel to complete its work once it is convened in 60 days. Because the Bureau indicates that the proposed rule for Large Participants will be coming out in March, it appears that the Bureau has made a determination of no SISNOSE, no significant impact on small business entities and therefore no SBREFA panel. We understand that preliminary steps are being taken to convene a panel for the TILA/RESPA rule which will be the first time the Bureau has participated in the SBREFA panel process. The size and complexity of that rule, and the fact that it will be the first one for the Bureau, will no doubt be a challenge for all involved.

Endnotes

1 For more information on the CFPB’s obligations under the Small Business Regulatory Enforcement and Fairness Act, see R. Eckman and J. Luxton, “The 'Speed Bump' Amendment in Dodd-Frank: What Is It and What Does It Do?” available at http://www.pepperlaw.com/publications_update.aspx?ArticleKey=1947.

2 Identified by CFPB as “Immediate Regulatory Priorities.”

Richard P. Eckman and Jane C. Luxton

Written by

Photo of Richard P. Eckman

Richard P. Eckman
Phone: 302.777.6560
Fax: 302.421.8390
eckmanr@pepperlaw.com

Photo of Jane C. Luxton

Jane C. Luxton
Phone: 202.220.1437
Fax: 202.220.1665
luxtonj@pepperlaw.com

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