Yesterday, Politico published a letter sent by Donald Trump's Assistant and Chief of Staff Reince Preibus to the heads of executive departments and agencies putting a hold on new regulations. The following are the primary directives in the memo, intended to ensure that appointees of the new President have the chance to put their stamp on anything new:

  1. With the exception of emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters, send no regulation to the Office of the Federal Register (the "OFR") until a department or agency head appointed or designated by the President after noon on January 20, 2017, reviews and approves the regulation. The department or agency head may delegate this power of review and approval to any other person so appointed or designated by the President, consistent with applicable law.
  2. With respect to regulations that have been sent to the OFR but not published in the Federal Register, immediately withdraw them from the OFR for review and approval as described in paragraph 1, subject to the exceptions described in paragraph 1.
  3. With respect to regulations that have been published in the OFR but have not taken effect, as permitted by applicable law, temporarily postpone their effective date for 60 days from the date of this memorandum, subject to the exceptions described in paragraph 1, for the purpose of reviewing questions of fact, law, and policy they raise.

The memo goes on to clarify that this request extends to "any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking," and also covers any agency statement of general applicability and future effect "that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue."

There has been speculation about whether this memo was sent to the CFPB, and whether it applies to independent agencies. An article yesterday in the Credit Union Times suggested that NCUA is not legally subject to the directives in the memo, however it would be politically risky to not comply. While the CFPB technically falls into that same independent category, the currently ongoing case of PHH v. CFPB in the D.C. Circuit Court muddies these waters. (Of note is that in a similar case, State National Bank of Big Spring, Texas, et al. v. Lew, et al., the D.C. federal district court has denied the request of the plaintiffs to consolidate their case with PHH.)

Immediately in question are the CFPB's proposed rules prohibiting forced arbitration clauses in consumer contracts (Proposed Rule was published in the Federal Register May 24, 2016; comment period closed August 22, 2016). Some had speculated that the bureau would try to push through a final rule prior to the change in administration, but this did not happen.

Even if the CFPB had rushed to issue a final rule prior to January 20, the Priebus memo covers regulations that have been published in the OFR but have not yet taken effect.

Also in question is the CFPB's proposed rulemaking on Payday, Vehicle Title, and Certain High-Cost Installment Loans (Proposed Rule was issued June 2, 2016, comments closed October 7, 2016. A final rule has not yet been issued).

insideARM Perspective

It is unclear exactly what effect this may have on debt collection rulemaking, however one can't help imagining it will slow the process further, as the matter of CFPB leadership shakes out.

On a related note, one thing we do know is that the bureau has been in the process of filling the open position of Debt Collection Program Manager. The position was created upon the recent promotion of John McNamara to Assistant Director of Consumer Lending, Reporting, and Collections Markets. Interviews have taken place but an appointment has not yet been announced.

Now that the Trump Administration has also issued a hiring freeze, a visit to the CFPB career openings page reflects no open jobs. insideARM is not aware of whether the hiring freeze has specifically affected the Debt Collection Program Manager position.


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