The bureau released highlights of its efforts to help consumers and implement rules. 2024 could bring changes to the bureau through the courts and legislation in Congress.
07/20/2023 3:10 P.M.
4 minute read
The Consumer Financial Protection Bureau celebrates its 12th anniversary July 21, ahead of a year that could bring significant change to its operations and funding, with a pending Supreme Court case and several reform bills in Congress on the docket.
The bureau highlighted its efforts to help consumers through enforcement and supervision, civil money penalties, its Ask CFPB database and consumer complaint database, among others.
“Our economy and our consumer finance markets are in transition, out of a pandemic and further into the digital era. Over the past few years, the CFPB has continued to deliver tangible results for the public, ensuring that consumers are protected, while preparing for the future as tech giants and artificial intelligence reshape the industry,” it reports in a news release.
It also highlighted its enforcement actions against “repeat offenders” and proposals to rein in “junk fees” from credit cards and bank overdrafts.
The bureau continues to focus on artificial intelligence technology used by financial institutions, including through an issue spotlight highlighting common consumer complaints and compliance issues.
What’s Ahead for the CFPB?
The CFPB is in the pre-rule stages for regulations of overdraft fees, fees for insufficient funds and a Fair Credit Reporting Act rulemaking.
It is also in the final rulemaking stages on supervision of nonbank entities that use form contracts for arbitration and creating a registry of nonbank covered entities that are subject to certain agency enforcement orders and court orders, according to its regulatory agenda.
ACA International filed comments on both of these proposals, ACA previously reported.
ACA continues to advocate that the CFPB should implement new requirements through rulemaking under the Administrative Procedure Act, not enforcement or interpretative guidance.
ACA submitted a letter (PDF) to the House Financial Services Committee and Senate Committee on Banking, Housing and Urban Affairs expressing concerns about how the bureau continues to target the work of the accounts receivable management industry without engaging in required rulemaking processes and providing stakeholders the opportunity to comment.
ACA’s concerns include the bureau’s apparent objective to completely remove any reference to outstanding medical debts from all credit reports, an interpretative rule on “junk fees” in the debt collection market and a proposed rule on nonbank registries.
The House Financial Services Committee passed CFPB reform legislation (PDF) for consideration by the full House of Representatives. Discussions related to ACA’s letter during a hearing included support for the bill to create more congressional oversight of the CFPB, ACA previously reported.
The CFPB is also seeking stakeholder feedback on the FCRA rulemaking through participation in a Small Business Regulatory Enforcement Fairness Act Panel, which is selected in coordination with the Small Business Administration’s (SBA) Office of Advocacy.
The bureau is among three federal agencies required to convene an SBREFA panel before proposing a rule that would “have a significant economic impact on a substantial number of small entities,” according to the SBA Office of Advocacy.
ACA is working with members participating in the SBREFA process for the proposed credit reporting rules and identifying both legal and policy concerns with CFPB actions related to medical debt.
In January this year, Chopra said in a statement on a recent report on nationwide CRAs that the bureau will be “exploring new rules” related to credit reporting.
Finally, the oral arguments in the Consumer Financial Protection Bureau v. Community Financial Services Association of America, Limited (CFSAA) have been set for Oct. 3.
The CFPB requested that the court address whether the 5th Circuit Court of Appeals erred in its ruling that the bureau’s funding structure through the Federal Reserve rather than the congressional appropriations process violates the U.S. Constitution’s separation of powers.
ACA filed its amicus brief in the case last week.
ACA’s brief (PDF), submitted by Brownstein Hyatt Farber Schreck, LLP counsel Christopher Murray, supports CFSAA, which filed suit against the CFPB and Director Rohit Chopra challenging the bureau’s 2017 payday lending rule on the grounds the rule is not valid because the CFPB’s funding structure is unconstitutional.
In the amicus brief, ACA argues that the Supreme Court should affirm the 5th Circuit’s decision on the CFPB’s funding structure but delay its judgment for six months to allow Congress time to consider options to reconstitute the bureau while minimizing disruptions for consumers and regulated entities, ACA previously reported.
The Supreme Court will hear six cases between Oct. 2 and Oct. 11. A decision in the CFPB case is expected to be issued between December 2023 and the end of June 2024.
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