After months of negotiations, on December 12, Congress overwhelmingly passed the Agricultural Improvement Act of 2018, which is also known as the “Farm Bill.”  For banks and payment processors, the Farm Bill’s passage is an important development because the bill includes language removing hemp from the list of prohibited substances under the federal Controlled Substances Act.

Hemp is a variety of the cannabis plant, but it does not produce a psychological “high.”  Instead, it’s used in manufacturing, including production of textiles, rope, and carpets, and for medicinal purposes.  Most states permit hemp’s use for both manufacturing and medicinal purposes.

But, for years, hemp has been classified as a controlled substance under the federal Controlled Substances Act, (21 U.S.C. ch. 13 § 801 et seq.), which created a federal law barrier to banks and payment processors working with hemp producers or merchants.

With the passage of the Farm Bill, however, that may be about to change.  Section 10113 of the Farm Bill removes hemp from the list of controlled substances under the federal Controlled Substances Act and amends the Agricultural and Marketing Act of 1946 to allow states to manage hemp production as long as hemp produced contains no more than a 0.3% concentration of tetrahydrocannabinol, or THC.

In accordance with the Farm Bill, a state that wants to manage hemp production within its borders must submit a plan for regulation and monitoring to the U.S. Secretary of Agriculture for approval.  However, a hemp producer in a state that does not submit a plan to the Secretary of Agriculture may still produce hemp as long as its production complies with the amended section 297C of the Agricultural and Marketing Act.

The Farm Bill further mandates that hemp producers complying with section 297C, as opposed to a state plan, must maintain information about the land on which the hemp is produced, test the hemp’s THC levels, establish procedures for disposing of any non-compliant hemp or hemp product, and submit to annual inspections.  Hemp producers operating under either an approved regulation-and-monitoring plan or section 297C are subject to licensing requirements as well as potential federal auditing.  Moreover, under the Farm Bill, states maintain authority to limit hemp’s production and marketing within their borders.  Thus, hemp producers, depending on where they operate, may still be restricted by state law.  States cannot, however, limit the transportation of hemp.

The Farm Bill creates an opportunity for banks and payment processors.  Banks and payment processors can now work with hemp producers and merchants without the looming threat of a federal law enforcement action.

The Farm Bill’s passage does not mean, however, that banks and payment processors can forego their regulatory compliance efforts.  A bank or payment processor must still ensure that any hemp producer or merchant is complying with the Farm Bill’s licensing requirement and TCH-level restriction.  In addition, a bank or payment processor that works with a hemp producer or merchant must still ensure that the producer or merchant is complying with any federally approved regulation-and-monitoring state plan or section 297C.  Indeed, those compliance efforts are critical, as violations can leave a hemp producer or merchant as well as its bank and payment processor subject to severe penalties, including a law enforcement action by the U.S. Attorney General.

President Trump signed the Farm Bill on December 20.

A wave of lawsuits filed under the Fair Debt Collection Practices Act, especially in the Second Circuit, continues regarding disclosures of interest and fees in collection letters.  Consumers have complained about failure to warn of interest and fees continuing to accrue, as well as failure to disclose that interest and fees did not accrue.  The Second Circuit addressed these issues three times in the past two years in Avila, Taylor, and Derosa.  However, this has not deterred the consumer bar from bringing new claims over even the most careful disclosures.

In this most recent unsuccessful putative class action, consumer plaintiff Andrew Gissendaner sued Enhanced Recovery Company over a letter that listed interest and fees as “N/A.”  The letter also explained that “upon receipt of [Gissendaner’s] payment and clearance of funds in the amount of $2,562, [his] account will be considered paid in full.”

Gissendaner posited that “N/A” for interest and fees was misleading because “every debt accrues interest” and listing “N/A” for interest could lead a least sophisticated consumer to think that interest never accrued on his debt.  Enhanced Recovery argued in response that the statements were true because no interest or fees accrued since the debt was placed with Enhanced Recovery for collection.  Enhanced Recovery also emphasized that Gissendaner was ignoring the part of the letter which stated that if he paid a specific amount by a certain date, his debt would be satisfied.

In its opinion granting Enhanced Recovery’s cross-motion for judgment on the pleadings, the Western District of New York did not have any difficulty concluding that the Second Circuit’s decision in Taylor governed.  To be sure, Gissendaner admitted that no interest or fees were accruing and “supplied no convincing reason why the Court should find Taylor distinguishable.”  Accordingly, the Court held that the letter was not confusing and that Gissendaner’s claim lacked merit.

Continued development of favorable precedent, such as this case, is vital in helping to deter meritless “current balance” or “reverse-Avila” claims.

On December 10, the Bureau of Consumer Financial Protection issued proposed revisions to its 2016 Policy on No-Action Letters and proposed a BCFP Product Sandbox.

The proposed new policy has two parts: Part I is a revision of a 2016 policy on No-Action Letters, and Part II is a description of the BCFP Product Sandbox. The revised No-Action policy would eliminate the data-sharing requirement of the 2016 Policy, which required applicants to commit to sharing data about the product or service. The revisions to the 2016 Policy would also speed up the time in which the BCFP would grant or deny an application for a No-Action Letter to 60 days.

The BCFP Product Sandbox would grant companies similar relief under Part I of the proposed rule but would also provide two forms of additional exemption relief: “1. Approvals by order under three statutory safe harbor provisions (approval relief); and 2. Exemptions by order from statutory provisions under statutory exemption-by-order provisions (statutory exemptions), or from regulatory provisions that do not mirror statutory provisions under rulemaking authority or other general authority (regulatory exemptions).” The Product Sandbox approval relief and exemption relief would be for a period of two years; however, to take advantage of the Product Sandbox, applicants are required to commit to sharing data with the BCFP with respect to the products or services offered.

The proposed policy has the following goals: “1. Streamlining the application process; 2. Streamlining the BCFP’s processing of applications; 3. Expanding the types of statutory and regulatory relief available; 4. Specifying procedures for an extension where the relief initially provided is of limited duration; and 5. Providing for coordination with existing or future programs offered by other regulators designed to facilitate innovation.” The Product Sandbox will help foster innovation and gain insight into how regulations may need to adapt to allow pro-consumer innovation.

This proposed policy may be of particular interest to the fintech world in the business-to-consumer context, given the innovation and energy to adapt delivery of products and services over the Internet and the sometimes awkward fit between the remote delivery model and some regulations. Comments on the revised policy are due no later than 60 days after the proposals are published in the Federal Register.

Last month, Troutman Sanders reported on the proposed TRACED Act which would instruct the Federal Communications Commission to engage in rulemaking to protect consumers from receiving unwanted calls and text messages from unauthenticated phone numbers.  FCC Chairman Ajit Pai tweeted his approval for the bill, but the FCC is not waiting on Congress to fight robocalls.  On November 21, it released its final report and order on creating a reassigned numbers database.

According to the FCC’s press release, the final draft of the report and order would create a comprehensive database to enable callers to verify whether a telephone number has been permanently disconnected, and is therefore eligible for reassignment, before calling that number, thereby helping to protect consumers with reassigned numbers from receiving unwanted robocalls.

More specifically, this proposal changes the existing federal regulatory scheme by:

  • Establishing a single, comprehensive reassigned numbers database that will enable callers to verify whether a telephone number has been permanently disconnected, and is therefore eligible for reassignment, before calling that number;
  • Establishing a minimum aging period of 45 days before permanently disconnected telephone numbers can be reassigned;
  • Requiring that voice providers that receive North American Numbering Plan numbers and the Toll Free Numbering Administrator report on a monthly basis information regarding permanently disconnected numbers; and
  • Selecting an independent third-party administrator, using a competitive bidding process, to manage the reassigned numbers database.

Pai announced the items tentatively included on the agenda for the December Open Commission Meeting scheduled for Wednesday, December 12. Considering that robocalls are the number one basis of complaints filed with the FCC and the speed in which the issue has been addressed, it will come as no surprise if the proposal is passed at the meeting.

Troutman Sanders will continue to monitor this and related FCC’s rulemaking decisions.

In an ominous sign, Americans’ total debt hit another record high, rising to $13.5 trillion in the last quarter, as student loan delinquencies jumped, according to Reuters. Specifically, flows of student debt into serious delinquency of 90 or more days rose to 9.1 percent in the third quarter from 8.6 percent in the previous quarter, reported the Federal Reserve Bank of New York, propelling the biggest jump in the overall U.S. delinquency rate in seven years.  

Total household debt, driven by $9.1 trillion in mortgages, now stands $837 billion higher than its previous peak in 2008, just as the Great Recession took hold and induced massive deleveraging across the United States. In fact, indebtedness has risen steadily for more than four years and sits more than 21% above its 2013 low point, and the $219 billion rise in total debt in the quarter that ended on September 30 amounts to the biggest jump since 2016. 

“The new charts in our report help to better understand how the debt and repayment landscape have shifted in the years following the Great Recession,” Donghoon Lee, research officer at the New York Fed, announced in a press release published on November 16. “Older borrowers now hold a larger share of total outstanding debt balances, while the shares held by younger borrowers have contracted and shifted toward auto loans and student loans.”

As Congress’ emboldened majority has sought to lessen the federal government’s regulatory footprint, the states have not always been quiet, as one summertime example amply shows.

In 2017, two congressmen introduced two bills which, if enacted, would expand the scope of federal preemption to include non-bank entities. Introduced by Rep. Patrick McHenry (R-N.C.), the first of these two bills – the Protecting Consumers’ Access to Credit Act of 2017 (HR 3299) – states that bank loans with a valid rate when made will remain valid with respect to that rate, regardless of whether a bank has subsequently sold or assigned the loan to a third party. A second bill known as the Modernizing Credit Opportunities Act of 2017 (HR 4439), championed by Rep. Trey Hollingsworth (R-Ind.), strives “to clarify that the role of the insured depository institution as lender and the location of an insured depository institution under applicable law are not affected by any contract between the institution and a third-party service provider.” Perhaps most significantly, it would establish federal preemption of state usury laws as to any loan to which an insured depository institution is the party, regardless of any subsequent assignments. In so doing, both bills amend provisions of the Home Owners’ Loan Act, Federal Credit Union Act, and/or Federal Deposit Insurance Act. Such an amendment would invalidate a long-line of judicial precedent barring a non-bank buyer’s ability to purchase a national bank’s right to preempt state usury law, which culminated in the Second Circuit’s 2015 decision in Madden v. Midland Funding, LLC, and thereby provide non-originating creditors with a potent – and until now nonexistent – shield against liability under certain state consumer laws.

On June 27, 2018, the attorneys general of twenty states[1] and the District of Columbia stated their opposition to both bills in a letter to Congressional leadership. Beginning with an historically accurate observation – “[t]he states have long held primary responsibility for protecting American consumers from abuse in the marketplace” – the A.G.s attacked these legislative efforts as likely to “allow non-bank lenders to sidestep state usury laws and charge excessive interest that would otherwise be illegal under state law.” The cudgel of preemption, they warned, would “undermine” their ability to enforce their own consumer protection laws. The A.G.s went on to argue many non-bank lenders “contract with banks to use the banks’ names on loan documents in an attempt to cloak themselves with the banks’ right to preempt state usury limits”; indeed, “[t]he loans provided pursuant to these agreements are typically funded and immediately purchased by the non-bank lenders, which conduct all marketing, underwriting, and servicing of the loans.” For their small role, the banks “receive only a small fee,” with the “lion’s share of profits belong[ing] to the non-bank entities.” In support of this position, the A.G.s cite to a 2002 press release by the Office of the Comptroller of the Currency (“OCC”) and the more recent OCC Bulletin 2018-14 on small dollar lending, the latter announcing the OCC’s “unfavorabl[e]” view of “an[y] entity that partners with a bank with the sole goal of evading a lower interest rate established under the law of the entity’s licensing state(s).

The A.G.s concluded by arguing that the proposed legislation would erode an “important sphere of state regulation,” state usury laws having “long served an important consumer protection function in America.”

We will continue to monitor this legislation and other developments in the preemption arena, and will report on any further developments.

[1] The signatories come from California, Colorado, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, Mississippi, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, Virginia, and Washington.

On November 16, Sen. John Thune (R-S.D.), the current chairman of the Senate Commerce Committee, and Ed Markey (D-Mass.), a member of the committee and the author of the Telephone Consumer Protection Act, unveiled the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (“TRACED Act”). Among other things, this bill would require carriers to eventually implement “an appropriate and effective call authentication framework” and instructs the Federal Communications Commission to engage in rulemaking to protect consumers from receiving unwanted calls and text messages from unauthenticated phone numbers.

According to its proponents, an “ever increasing number … of robocall scams” prompted this bill. Indeed, one report touted by Markey estimated the number of spam calls will grow from 29% of all phone calls this year to 45% of all calls next year.

In its current form, the TRACED Act gives regulators more time to find scammers, increases civil forfeiture penalties for those caught, promotes call authentication and blocking adoption, and brings relevant federal agencies and state attorneys general together to address impediments to criminal prosecution of robocallers who intentionally flout laws.

More specifically, this act makes the following changes to the existing federal regulatory scheme:

  • Broadens the authority of the FCC to levy civil penalties of up to $10,000 per call for those who intentionally violate telemarketing restrictions.
  • Extends the window for the FCC to catch and take civil enforcement action against intentional violations to three years after a robocall is placed. Under current law, the FCC has only one year to do so. The FCC has told the committee that “even a one-year longer statute of limitations for enforcement” would improve enforcement against willful violators.
  • Brings together the Department of Justice, FCC, Federal Trade Commission, Department of Commerce, Department of State, Department of Homeland Security, the Consumer Financial Protection Bureau, and other relevant federal agencies, as well as state attorneys general and other non-federal entities, to identify and report to Congress on improving deterrence and criminal prosecution at the federal and state level of robocall scams.
  • Requires providers of voice services to adopt call authentication technologies, enabling a telephone carrier to authenticate consumers’ phone numbers prior to initiating any call.
  • Directs the FCC to initiate a rulemaking to help protect subscribers from receiving unwanted calls or texts from callers using unauthenticated numbers.

Announcing the TRACED Act, neither senator minced their words. “The TRACED Act targets robocall scams and other intentional violations of telemarketing laws so that when authorities do catch violators, they can be held accountable,” Thune said in a statement. He continued: “Existing civil penalty rules were designed to impose penalties on lawful telemarketers who make mistakes. This enforcement regime is totally inadequate for scam artists and we need do more to separate enforcement of carelessness and other mistakes from more sinister actors.” Markey added: “As the scourge of spoofed calls and robocalls reaches epidemic levels, the bipartisan TRACED Act will provide every person with a phone much needed relief. It’s a simple formula: call authentication, blocking, and enforcement, and this bill achieves all three.”

Troutman Sanders will continue to monitor this and related legislative proposals.

In a recent decision dismissing a purported class action against Zillow Group, Inc., launched by disgruntled purchasers of the company’s securities, the United States District Court for the Western District of Washington provided a remarkably thorough—and an eminently useful—distillation of the federal judiciary’s emergent application of the Real Estate Settlement Procedures Act of 1974 (“RESPA”) to today’s increasingly popular co-marketing programs.  To the many defendants potentially subject to this statute, this opinion offers a roadmap for minimizing their legal exposure and defeating liability.


Program at Issue

To this day, Zillow generates the majority of its revenue through advertising sales to real estate professionals. With $150 million in cash in the winter of 2013, Zillow launched a new advertising product, a then-unique co-marketing program (herein referred to as “the Program”). This Program allows participating mortgage lenders to pay a percentage of a real estate agent’s advertising costs directly to Zillow in exchange for appearing on the agent’s listings and receiving some of the agent’s leads. (“Leads” are created whenever a user views an agent’s listing on Zillow and decides to send their contact information to the agent directly.) In return for this payment, the participating lenders appear on the co-marketing agent’s listings as “preferred lenders,” their picture and contact information appended. When a user chooses to provide an agent with their contact information, Zillow automatically dispatches their personal information to the co-marketing lender, unless the user affirmatively opts out. “Because users are able to opt out of sending their contact information,” the Court explained, “lenders receive, on average, 40% of the leads received by their co-marketing agents.”

Prior to 2017, an individual lender could pay up to 50% of a co-marketing agent’s advertising costs, and up to five lenders could collectively pay 90%. If a single lender co-marketed with an agent, that lender appeared on all of the agent’s listings. But when multiple lenders co-marketed with a single agent, each lender appeared randomly on the agent’s listings based on that lender’s pro-rata share of the agent’s overall advertising spend.

Relevant Law

RESPA focuses on consumers in the market for real estate “settlement services,” defined as encompassing “any service provided in connection with a real estate settlement, including, but not limited to” title searches, title insurance, attorney services, document preparation, credit reports, appraisals, property surveys, loan processing and underwriting, and the like. This statute aims to curtail the cost of real estate transactions by promoting the disclosure of “greater and more timely information on the nature and costs of the settlement process” and by protecting consumers from “unnecessarily high . . . charges caused by certain abusive practices.”

RESPA’s eighth section focuses on the elimination of kickbacks and unearned fees. Dealing with “business referrals,” Section 8(a), as codified in 12 U.S.C. § 2607(a), prohibits giving or accepting “any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” Courts commonly find a violation of Section 8 when all of the following elements are present: (1) a payment or thing of value was exchanged, (2) pursuant to an agreement to refer settlement business, and (3) there was an actual referral.  Section 8(b) further cabins liability under this provision: “No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.” This part of RESPA concludes with a safe harbor permitting “[a] payment to any person of a bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed.”

Instant Case

Plaintiffs’ Relevant Claims

In their amended complaint, Plaintiffs attacked the Program for violating RESPA’s Section 8 in “two overarching ways.” First, they characterized the co-marketing program as an impermissible “vehicle to allow real estate agents to make illegal referrals to lenders in exchange for the lenders paying a portion of the agents’ advertising costs to Zillow.” As Plaintiffs’ alleged, “Defendants created the co-marketing program to allow real estate agents to steer prospective home buyers to mortgage lenders, in exchange for the lenders paying a portion of the agent’s advertising costs to Zillow.”  Second, the Program, they insisted, “allow[ed] lenders to pay a portion of their agents’ advertising costs that was in excess of the fair market value for the advertising services they actually receive.” Either theory, if accepted, would have left Zillow exposed to liability under RESPA.

Court’s Opinion

In trenchant prose, the Court found neither basis to be sufficiently pled under the heightened standard applicable to fraud claims.

The Court discerned no iota of legal or factual viability in Plaintiffs’ first theory: “that the co-marketing program is per se illegal because it allowed agents to make referrals in exchange for lenders paying a portion of their advertising costs.” Although Plaintiffs rested much of this theory on PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1 (D.C. Cir. 2016), the Court noted its rejection of the broad theory of RESPA liability espoused by the Consumer Financial Protection Bureau. Instead, as the Court stressed, the D.C. Circuit had “held that RESPA’s safe harbor allows mortgage lenders to make referrals to third parties on the condition that they purchase services from the lender’s affiliate, so long as the third party receives the services at a ‘reasonable market value,’” an approach pioneered by the Ninth Circuit’s Geraci v. Homestreet Bank, 347 F.3d 749 (9th Cir. 2003).

Under this precedent, the Complaint failed for three reasons. First, the Program, as depicted by Plaintiffs themselves, only “allows agents and lenders to jointly advertise their services without requiring agents to refer business to lenders.” Because it does not “explicitly involve … the referral of mortgage insurance business in exchange for the purchase of re-insurance from the referring business,” it falls beyond RESPA’s purview. Second, the Complaint utterly lacked enough “particularized facts demonstrating that co-marketing agents were actually providing unlawful referrals to lenders.  Third, even if “co-marketing agents were making mortgage referrals, such referrals would fall under the Section 8(c) safe harbor because lenders received advertising services in exchange for paying a portion of their agent’s advertising costs.”

Rather than a trio, one reason alone doomed Plaintiffs’ second theory. To wit, despite “explain[ing] in detail how the . . . [P]rogram is structured,” Plaintiffs had failed to allege, with the requisite specificity, that “specific co-marketing lenders were paying more than fair market value for the advertising services they received from participating in the program.”  As one example, the Court pointed to Plaintiffs’ failure to allege that one co-marketing agent provided a mortgage referral to a specific lender in exchange for that lender paying an amount to Zillow that was above the market value of the advertising services it received. That some lenders refused to pay more than 31% of an agent’s advertising costs, it pointed out, did not render that percentage equivalent to the relevant service’s fair market value. Some more definite and precise allegations, entirely missing from the complaint, were necessary.

Potential Impact

The Decision holds a distinct promise for defendants in RESPA actions based on co-marketing programs similar to Zillow’s own.

Specifically, it shows how potent RESPA Section 8’s safe harbor, as previously construed by the D.C. Circuit in PHH Corp. and the Ninth Circuit in Geraci, can be at the pleading stage. Within this growing line of caselaw, this provision has been read to authorize lenders to pay a portion of their agents’ advertising costs, so long as those payments reflect the fair market value for the advertising services they actually receive. A plaintiff’s failure to allege, with specificity, how precisely a lender’s payment exceeds the market value could thus readily set their complaint up for prompt dismissal.

In short, in the wake of Zillow’s victory, well- and carefully-designed co-marketing programs today stand on firmer legal ground.

Despite two controlling decisions by the Second Circuit in Avila and Taylor, claims involving the “amount of debt” disclosure under the Fair Debt Collection Practices Act (“FDCPA”) continue to evolve thanks to the relentless efforts by the New York plaintiffs’ bar.  But these permutations of the “amount of debt” claims continue to be successfully pushed back by defendants.  In a recent ruling, the United States District Court for the Eastern District of New York granted summary judgment in a debt collector’s favor and held that the collector was not required to disclose that the balance could increase due to a prospective award of costs in a state court action.  A link to the decision can be found here.

Defendant Selip & Stylianou, LLP sent consumer plaintiff James Stewart a letter advising him that it was initiating a lawsuit in state court to collect an outstanding debt with a balance of $3,182.84.  The letter also advised Stewart that the legal documents had already been filed.  The complaint in the state court action sought costs associated with the lawsuit, but the letter did not disclose that the balance could increase due to such costs.  Stewart sued the debt collector, claiming that the letter was false and misleading since it failed to disclose the potentially increasing nature of the outstanding balance.

On summary judgment, Selip & Stylianou submitted an affidavit demonstrating that the amount of debt was static because no interest or fees accrued on the debt.  The affidavit further explained, “Only if legal action is commenced against a consumer does [creditor] seek actual disbursements incurred associated with any lawsuit, and even then only upon entry of judgment and only for the amount awarded in the judgment entered by the court.”  Despite this sworn explanation, Stewart still argued that, because Selip & Stylianou was seeking costs incurred in prosecuting the state court action, the payment of the full amount disclosed on the face of the letter would have not satisfied the debt and the balance was thus not static.  The Court disagreed and found that the balance remained static “even after the commencement of the [s]tate [c]ourt [a]ction because costs had not been awarded, and in fact, might never be awarded.”  The Court also pointed out that subsequent letters which stated the same balance further undermined Stewart’s claims and that summary judgment in Selip & Stylianou’s favor was appropriate.

“Amount of debt” claims remain risky because an outstanding balance is listed in every collection letter and periodic compliance review is crucial due to the rapidly evolving precedent.  Troutman Sanders will continue to monitor this line of cases.

On October 17, the Office of Information and Regulatory Affairs released the CFPB’s fall 2018 rulemaking agenda.  In the preamble to the agenda, the CFPB notes that the agenda lists the regulatory matters that the agency “reasonably anticipates having under consideration during the period from October 1, 2018 to September 30, 2019.”

Implementing Statutory Directives.  According to the CFPB, much of its rulemaking agenda focuses on implementing statutory directives.  Those statutory directives include:

  • The directive by the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA”) that the CFPB engage in rulemaking to (1) exempt certain creditors with assets of $10 billion or less from certain mortgage escrow requirements under the Dodd-Frank Act, and (2) develop standards for assessing consumers’ ability to repay Property Assessed Clean Energy (“PACE”) financing; and
  • The Dodd-Frank Act’s directive that the CFPB, prior to any public disclosure, modify or require modification of loan-level data submitted by financial institutions under the Home Mortgage Disclosure Act (“HMDA”) so as to protect consumer privacy interests.

Continuation of Other Rulemakings.  In addition, the CFPB notes that it “is continuing certain other rulemakings described in its Spring 2018 Agenda.”  Those continuing rulemaking efforts include:

  • Anticipated rulemaking to reconsider the 2017 Payday, Vehicle Title, and Certain High-Cost Installment Loans Rule; 
  • Anticipated rulemaking to reconsider its 2015 HMDA rule, for instance, by potentially revisiting such issues as the institutional and transactional coverage tests and the rule’s discretionary data points; and 
  • Anticipated rulemaking to address how to apply the 40-year-old Fair Debt Collection Practices Act (“FDCPA”) to modern collection practices.

Further Planning.  The CFPB also notes that it “has a number of workstreams underway that could affect planning and prioritization of rulemaking activity, as well as the way in which it conducts rulemakings and related processes.”  Those workstreams include:

  • Ongoing efforts to reexamine rules that the Bureau issued to implement Dodd-Frank Act requirements concerning international remittance transfers, the assessment of consumers’ ability to repay mortgage loans, and mortgage servicing;
  • Ongoing efforts to reexamine rules implementing a Dodd-Frank Act mandate to consolidate various mortgage origination disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act;
  • Ongoing efforts to reexamine the requirements of the Equal Credit Opportunity Act (“ECOA”) concerning the disparate impact doctrine, in light of recent Supreme Court case law and Congressional disapproval of a prior Bureau bulletin concerning indirect auto lender compliance with ECOA and its implementing regulations; and
  • Ongoing efforts directed at determining whether rulemaking or other activities may be helpful to further clarify the meaning of “abusiveness” under section 1031 of the Dodd-Frank Act.