New year, new regulatory focus.
Well, not exactly. Most of the matters on the CFPB’s most recent rulemaking agenda, released on January 4, 2023, were either foreshadowed or explicitly outlined in CFPB Director Rohit Chopra’s June, 2022 blog post, “Rethinking the approach to regulations.” There are three areas of particular interest: eliminating what the CFPB calls “junk fees,” implementing “long-standing Congressional directives” that have not been used, and, perhaps most interestingly, a potential amendment to the FCRA.
Here is a breakdown of those three critical takeaways:
Credit reporting continues to be a focus, though it’s not clear what changes we’ll see from The Bureau.
In a theme continued from 2022, the CFPB clearly intends to focus on credit reporting in 2023, but the entry on the agenda is cryptic at best:
The Bureau is considering whether to amend Regulation V.
We can wager some educated guesses as to what changes they’re considering, such as positive reporting requirements for more types of debt (like utilities and phone bills or BNPL accounts), additional regulations around reporting inaccurate information, and more scrutiny on investigations of consumer complaints or disputes.
This is surely something to keep an eye on throughout 2023.
The Bureau plans to give consumers more access to, and control over, their personal data.
Section 1033 of the Dodd-Frank Act that requires financial institutions to provide consumers with their data through the channel of the consumer’s choice, and while this provision isn’t new, it’s not an authority the CFPB has invoked. Until now.
While most banks and lenders are already operating under this standard, it will be a challenge for your third-party collection agencies, who aren’t traditionally integrated with fintechs like Chime, Plaid, and Mint, etc. This is still in the comment period, but the CFPB did indicate a desire to get this rolled out before the next election cycle.
Penalties and fees are a focus of the agenda for 2023.
Overdraft fees: Regulation Z was adopted in 1969, and, according to the agenda, “the nature of overdraft services, including how accounts can be overdrawn and how financial institutions determine whether to advance funds to pay the overdrawn amount, has significantly changed since 1969, the special rules remain largely unchanged.”
NSF Fees: Though many banks and lenders have stopped charging NSF fees voluntarily, the CFPB is considering new rules against NSF fees in 2023.
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