WASHINGTON—The Consumer Financial Protection Bureau has released a panel report as part of its rulemaking process under Dodd-Frank Act Section 1071 governing the collection and reporting of small business lending data.
Separately, NAFCU is again calling on the CFPB to make a number of reforms.
The panel report is based on feedback from a panel of representatives of small entities likely to be affected directly by a Section 1071 regulation, referred to as small entity representatives or SERs.
In their feedback, the CFPB said the SERs were generally supportive of the Bureau’s statutory mission to enact rules under Section 1071, with several SERs stating a 1071 rulemaking is necessary to better understand the small business lending market. Further, SERs requested, and the panel agreed, that, among other things the Bureau should issue implementation and guidance materials specifically to assist small financial institutions in complying with an eventual Section 1071 rule, and to consider providing sample disclosure language, according to the CFPB.
The Bureaus said the feedback from small entity representatives and the panel’s findings and recommendations will be used to prepare a notice of proposed rulemaking to implement Section 1071.
The panel report can be found here.
NAFCU Urges Reforms
Meanwhile, saying it is seeking to ensure credit unions have a “healthy and appropriate” regulatory environment, NAFCU has outlined for the CFPB several reform opportunities.
While NAFCU noted it continues to urge the Bureau to use its exemption authority to exempt credit unions from its rulemakings, in the absence of providing such an exemption the trade group is calling for the Bureau to reform:
- COVID-related guidance: “NAFCU asks for additional guidance under the Fair Credit Reporting Act (FCRA), specifically related to furnishing information to a credit reporting agency in the case of an accommodation, as well as Regulation Z and advertising rules related to the marketing and disclosure requirements for promotional rates as credit unions have worked to assist members during the pandemic,” the trade association wrote.
- E-SIGN: “NAFCU has consistently sought modernization of the Electronic Signatures in Global and National Commerce Act (E-SIGN Act) and, in light of the coronavirus pandemic, NAFCU has urged the CFPB to modernize electronic disclosure and signature-related provisions of all its regulations in order to provide more flexibility and simplified compliance,” the trade association said.
- Examinations: As the CFPB has examination authority over credit unions with more than $10 billion in assets, the association is recommending the Bureau better coordinate with NCUA examiners to alleviate examination burdens and eliminate overlapping or consecutive examinations.
- London Interbank Offered Rate (LIBOR) transition: LIBOR is set to stop publishing in 2021; the CFPB in June released several resources and a proposed rulemaking to ease the transition for consumers and regulated entities. NAFCU is asking the Bureau consider ways to alleviate risks to credit unions and adopt a supervisory policy that accommodates for the reasonable, good-faith interpretations of contract language that refers to the unavailability of LIBOR.
- Home Mortgage Disclosure Act (HMDA): NAFCU pointed to what it called the costly and burdensome compliance requirements of HMDA and asks the Bureau to consider scaling back the collection of discretionary data points and providing higher reporting thresholds.
- Section 1071: As the Bureau works to implement section 1071 of the Dodd-Frank Act requiring financial institutions to collect and report small business loan data similar to HMDA, NAFCU said it has urged the Bureau to delay the rulemaking and either exempt credit unions or provide alternative forms of exemptive relief under related rules.
- Qualified mortgage (QM): While the Bureau last week issued final rules related to the general QM definition and seasoned QM, NAFCU said it is reiterating its call to further extend the government-sponsored enterprise (GSE) patch and consider definitions that ensure access to credit with similar legal protections.
- Credit Card Accountability and Disclosure Act (CARD Act): NAFCU asks the Bureau to simplify requirements for delivering CARD Act disclosures electronically and exclude secured credit cards from ability-to-repay requirements.
- Unfair, deceptive, or abusive acts and practices (UDAAP): The CFPB earlier this year released a policy statement clarifying the “abusive” prong of the UDAAP provision. NAFCU said it has long urged the Bureau to offer clarity, including specific guidance on prohibited practices.
- Section 1033: NAFCU said it highlights its support of the CFPB's efforts to promote consumer access to financial records, but reiterates the need to preserve bilateral data sharing agreements instead of replacing them to avoid inadvertent consumer harm or systemic risk from unsupervised data aggregators.
- Electronic Fund Transfer Act (Regulation E): As mobile payment apps become more prevalent, NAFCU asks the bureau to provide guidance for instances where a financial institution owns a dispute, as well for the timing of disclosures.
- Small entity exemption authority: Noting the unique structure and constraints of credit unions, NAFCU repeated its call for the Bureau to use its exemption authority to better tailor regulations and provide exemptive relief, especially for smaller institutions.