ARLINGTON, Va.–The CFPB Director, Kathy Kraninger, has offered her insights on a number of issues of interest to credit unions.
Kraninger shared her views during NAFCU’s Virtual Congressional Caucus. The questions were posed by NAFCU CEO Dan Berger. Here’s a look at the questions posed and Kraninger’s responses:
Berger: When the pandemic hit, the CFPB made some quick work in diving in. Can you let us know the Bureau’s approach to consumer protection during the pandemic and the economic upheaval?
Kraninger: It’s a critical time. From the CFPB’s standpoint, first and foremost it was about educating and informing consumers. With what’s happening in congressional action and the marketplace we are making sure we are conveying to consumers what their rights are, and to companies what their responsibilities are.
The last thing I would note is, most importantly, when it comes to housing we have partnered with HUD and others on a consolidated website for all the information consumers and financial institutions need on mortgage forbearance and other rights and responsibilities (cfpb.gov/housing).
Berger: Under the current administration we have seen targeted reg relief while ensuring important consumer protections remain intact. Getting granular, can you talk about your approach to rulemaking as it relates to HMDA?
Kraninger: We have seen a number of changes over the years related to HMDA requirements. We have taken over the rulemaking and the data collection system. It’s incredibly time consuming. We really did a whole review. We issued an RFP to all stakeholders on where there is opportunity for improvement.
With the regulatory agenda, we have already done work to increase the open and closed-end threshold. We are doing an analysis of the data, including the privacy aspects of this. We also want to make sure the whole thing works and there is the ability for the public to access the data. We are engaged now in a number of tech sprints to make sure that information is usable and that we get the right reports out of it. We did a significant modernization of the system and are excited to see progress on that.
We are going to be smart, we are going to carry out the law, and we are going to make sure our systems are carrying out what they are intended to do.
Berger: Can you tell our members about the Bureau’s approach to QM rulemaking and how it will improve consumers’ financial well-being?
Kraninger: This was critical piece of rulemaking coming out of the Dodd-Frank Act. But Congress in its wisdom did want us to assess if the rule is doing what is intended to do. We had a number of important learnings. We have found Appendix Q use not taking off as we thought, and the dynamic with the QM Patch replacement is not taking place in quite the way we had expected. We are looking at how expiration of the QM patch would affect access by minority communities and communities of color to the mortgage market.
We have looked at it, gotten public comment, and are looking to ensure again we are carrying out what Congress intended.
Berger: When will rule be finalized?
Kraninger: We are going through comments and are going to have another agenda out soon. But it is something we will push out by end of the year on what the path and timeline are.
Berger: What is the process the Bureau anticipates for the rulemaking with section 1071 of the Dodd Frank Act (which amended the Equal Credit Opportunity Act to mandate certain reporting requirements for lenders making business loans)?
Kraninger: Section 1071 a mandatory rulemaking of Dodd Frank Act. It’s a very challenging one. It’s clear Congress had HMDA in mind with this, but the small business space is very different than the mortgage space. We have had a deliberate conversation around this. It is very much a rule that affects small entities. The outline will come out (Tuesday). The small entity panel will come together very soon thereafter and we will be gathering comments through that process. It is not something we are going to be rushing through, so there is no further timeline.