CFPB ends pandemic relief on HMDA reporting and other regulations

The Consumer Financial Protection Bureau is rescinding seven policy statements issued last year under the Trump administration that gave flexibility to financial institutions dealing with fallout from the coronavirus pandemic.

The agency said effective April 1 it would undo relief from resolving credit card billing disputes, flexibility on exams and enforcement, and a reprieve from submitting loan data under the Home Mortgage Disclosure Act, among other policies.

“Providing regulatory flexibility to companies should not come at the expense of consumers,” acting CFPB director Dave Uejio said in a news release. “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 CFPB added in the release that by winding down the seven policy statements, the agency “is providing notice that it intends to exercise the full scope of the supervisory and enforcement authority provided under the Dodd-Frank Act.”

The policy decisions made under former CFPB Director Kathy Kraninger were published between March 26 and June 3 of last year and offered supervisory and enforcement relief to institutions in light of the pandemic.

Among the policies the agency is walking back is guidance to institutions that the CFPB would take into account any COVID-19-induced staffing shortages or lack or resources in its supervision and enforcement efforts.

In that guidance, the CFPB also said it would “be sensitive to good-faith efforts demonstrably designed to assist consumers.” A month later, it conveyed the same message to consumer reporting agencies. It is now rescinding both statements.

The CFPB is also reversing June 2020 guidance in which it said it would not take action against credit card issuers if they did not obtain a consumer’s electronic consent of certain disclosures, so long as that consent was given over the phone.

However, the bureau is leaving some elements of the policy statements intact, including the agency’s support for providing customers with payment relief options and its decision not to take action against credit data suppliers that provide consumer reporting agencies with accurate information.

The CFPB is also replacing a 2018 bulletin on supervisory communications with updated guidance describing how the agency uses “matters requiring attention” to communicate its supervisory expectations.