Recently, the Consumer Financial Protection Bureau (CFPB) rescinded seven policy statements issued during 2020 that provided temporary relief for financial institutions in consumer financial markets including mortgages, credit reporting, credit cards and prepaid cards. When announcing the rescissions, Dave Uejio, Acting Director of the CFPB, put financial institutions on notice that the CFPB intends to exercise the full scope of its supervisory and enforcement authority under the Dodd-Frank Act:
“Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities. The CFPB’s first priority, today and always, is protecting consumers from harm.”
The rescinded policy statements include:
The rescissions took effect on April 1.
The CFPB also rescinded its 2018 bulletin on supervisory communications and replaced it with a revised bulletin regarding Changes to Types of Supervisory Communications that described its use of Matters Requiring Attention (MRAs) to effectively convey supervisory expectations. The revised bulletin notes that “examiners will continue to rely on Matters Requiring Attention to convey supervisory expectations” and will no longer issue Supervisory Recommendations. It further stated that “bureau examiners may issue MRAs with or without a related supervisory finding that a supervised entity has violated a Federal consumer financial law.”
The rescissions serve as an another example of a change in direction at the CFPB under President Biden’s administration. Mr. Uejio has stated that he plans to take steps to “revers[e] policies of the last administration that weakened enforcement and supervision.” Those plans include “rescind[ing] public statements conveying a relaxed approach to enforcement of the laws in our care.” As a result, all consumer financial services providers should prepare for a more aggressive CFPB and commence a thorough review of their existing compliance policies and practices to make sure they will withstand heightened scrutiny from the CFPB.
Waller Financial Services Industry Team
If you or your management team has questions or concerns regarding the CFPB’s rescissions, please contact Richard Hills, Wes Scott, Rachel Parker or your regular contact on Waller’s Financial Services Industry Team.
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