Last week the Consumer Financial Protection Bureau (CFPB) issued a Request for Information (RFI) regarding Adopted Regulations and New Rulemaking Authorities. As it relates to the ARM industry, this is a fancy title for, “tell us what you think of the FDCPA.”
You can download the complete RFI here. The 90-day comment period is expected to close approximately June 19, 2018.
While the recent RFI regarding rulemaking processes specifically noted that the Bureau is not looking for suggestions regarding any specific rule, but instead is seeking input on the process itself, this RFI provides a different opportunity. In this case, the CFPB is looking for input on the substance of the regulations, including whether the Bureau should issue additional rules. (emphasis added)
According to the RFI, “Adopted Regulations include rulemakings adopted under Federal consumer financial law and issued by the Bureau since the designated transfer date in 2011, including rules that were adopted pursuant to specific instructions from Congress. The term also includes new rulemaking authorities given to the Bureau by the Dodd-Frank Act under the Federal consumer financial laws.”
The Bureau requests commenters provide specific suggestions regarding updates or modifications that should be made to Adopted Regulations – and also aspects of the Regulations that should not be modified.
The following specific questions are provided, but commenters are free to answer only some of them – or offer others.
1. Aspects of the Adopted Regulations that:
- Should be tailored to particular types of institutions or to institutions of a particular size;
- Create unintended consequences;
- Overlap or conflict with other laws or regulations in a way that makes it difficult or particularly burdensome for institutions to comply;
- Are incompatible or misaligned with new technologies, including by limiting providers’ ability to deliver, electronically, mandatory disclosures or other information that may be relevant to consumers; or
- Could be modified to provide consumers greater protection from the incidence and effects of identity theft.
2. Changes the Bureau could make to the Adopted Regulations, consistent with its statutory authority, to more effectively meet the statutory purposes and objectives set forth in the Federal consumer financial laws, as well as the Bureau’s specific goals for the particular Adopted Regulation.
3. Changes the Bureau could make to the Adopted Regulations, consistent with its statutory authority, that would advance the following statutory purposes and objectives as set forth in section 1021 of the Dodd-Frank Act:
- The statutory purposes set forth in section 1021(a) are: i. All consumers have access to markets for consumer financial products and services; and ii. Markets for consumer financial products and services are fair, transparent, and competitive.
- The statutory objectives set forth in section 1021(b) are: i. Consumers are provided with timely and understandable information to make responsible decisions about financial transactions; ii. Consumers are protected from unfair, deceptive, or abusive acts and practices and from discrimination; iii. Outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens; iv. Federal consumer financial law is enforced consistently in order to promote fair competition; and v. Markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.
4. Pilots, field tests, demonstrations, or other activities that the Bureau could launch to better quantify benefits and costs of potential revisions to the Adopted Regulations, or to make compliance with the Adopted Regulations more efficient and effective.
5. Areas where the Bureau has not exercised the full extent of its rulemaking authority in connection with a specific Adopted Regulation or with regard to rulemaking authorities created by the Dodd-Frank Act under the Federal consumer financial laws, and where rulemaking would be beneficial and align with the purposes and objectives of the applicable Federal consumer financial laws.
Finally, the Bureau asks,
"From all of the suggestions, commenters are requested to offer their highest priorities, along with their explanation of how or why they have prioritized suggestions. Commenters are asked to single out their top priority. Suggestions should focus on revisions that the Bureau could implement consistent with its authorities and without Congressional action."
On January 17, 2018 CFPB Acting Director Mick Mulvaney announced that he was issuing a "call for evidence" to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers. Since then a series of requests has been released about activities including:
- Civil Investigative Demands (comment period closes April 26 -- extended from March 27)
- Administrative Adjudication (comment period closes May 7 -- extended from April 6)
- Enforcement (comment period closes May 14 -- extended from April 13)
- Supervision (comment period closes May 21)
- External Engagements (comment period closes May 29)
- Consumer Complaint Portal (comment period closes June 4)
- Rulemaking Processes (comment period closes June 7)
Also expected soon are calls for evidence on these topics:
- Inherited Rules
- Guidance and Implementation Support
- Consumer Education
- Consumer Inquiries
Unlike the Debt Collection rulemaking process to date, this is an opportunity for industry to be proactive in making its case for change. Previously, industry participants have been in reactive mode, responding to an extensive list of concepts, first in the Advance Notice of Proposed Rulemaking, and then in the Outline of Rule Proposals that was published in advance of the Small Business Regulatory Fairness Enforcement Act (SBREFA) hearing. In contexts like these, where commenters are responding to hundreds of questions, priorities can get lost in the shuffle.
Personally? I think one of the most problematic concepts for the industry is third party disclosure. Not that I believe collectors shouldn't have to worry about third party disclosure, but the contortions required to comply with this very broad concept have left the industry back in the 20th century. Nearly every innovation or new technology that collectors seek to apply -- in full use by other industries -- gets knocked down because of what amounts to a threat of third party disclosure. We need a fresh look at this concept, and at the responsibility of consumers to keep communications private.
As I've said before, there has to be a #BetterWay.