Rulemaking to Impact ARM Industry is Imminent, CFPB Director Kathy Kraninger's First Semiannual Report Reveals

Kraninger’s report should serve as the basis of her testimony before the House Financial Services Committee March 7.

2/27/2019 3:30 PM

Rulemaking to Impact ARM Industry is Imminent, CFPB Director Kathy Kraninger's First Semiannual Report Reveals

The Consumer Financial Protection Bureau, as outlined in its fall 2018 unified agenda and latest semiannual report issued in February, will work toward releasing a proposed rule concerning FDCPA collectors’ communications practices and consumer disclosures.

As ACA International continues to prepare for the proposed FDCPA rule, it’s clear based on the recent report that the rule’s release is a matter of when, not if. (Listen to commentary on the pending rule from ACA International experts on ACA Cast.)

The semiannual report is the first issued by CFPB Director Kathy Kraninger, although it covered a period (April 1, 2018 to Sept. 30, 2018) before the start of her term in December last year.

“This report describes issues facing consumers, actions undertaken by the CFPB to protect them, and what the bureau is doing internally to help it do its job better,” Kraninger said in the report’s introduction. “While this reporting period took place before I started as director, the activities described provide a backdrop and a launching pad for a fresh start at this agency.”

The semiannual report generally covers a review of consumers’ access to financial services and products, plans for rulemaking by the CFPB, an analysis of consumer complaints and an overview of supervisory and enforcement activities.

“While I am director, the CFPB will vigorously and evenhandedly enforce the law,” Kraninger said in the report. “As I begin my stewardship of the CFPB, I will also be moving forward with the agency as a team to make sure the American people have access to the financial products and services that best suit their individual needs; the financial institutions that serve them are competing on a level playing field; and the marketplace is innovating in ways that enhance consumer choice.”

Highlights from the report include:

  • “Credit invisibility” is among the significant problems faced by consumers when shopping for or obtaining consumer financial products or services. “Credit invisible” consumers do not have a credit record with one of the three nationwide consumer reporting agencies or they have a record with too little information or information that is too old to develop a credit score. Consumers can have trouble accessing certain forms of credit without a credit report or enough information in the report to determine their credit score. The bureau previously released two data points as well as research, “The Geography of Credit Invisibility” during the reporting period.
  • While the bureau issued its final rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans in January 2018 officials announced that the bureau would reconsider the rule
  • During the reporting period, the CFPB also completed many significant initiatives, including requests for information on bureau processes for consumer complaints and consumer inquiries, guidance and implementation support, adopted regulations and new rulemaking authorities, and more.
  • The CFPB received approximately 329,000 consumer complaints between Oct. 1, 2017, and Sept. 30, 2018. Credit reporting represented 37 percent of these complaints, followed by 25 percent for debt collection. Companies responded to approximately 93 percent of complaints submitted for response during that time period, like the last report.

ACA International submitted comments to the CFPB related to its assessment of efficiency and effectiveness of its Data Governance Program and Data Collections, which inform taking consumer complaints, in January. ACA International stressed the need to integrate more transparency and collaboration with stakeholders in the review process.  

In the report, Kraninger acknowledged work the bureau has going forward and her plans to interact with stakeholders, including a listening tour with consumer advocates, banks, members of Congress, other regulators and more. Indeed, Kraninger visited ACA International members Irwin Bernstein of CMS Services and executives of Harris & Harris, Ltd. (H&H) in a meeting in February.

Meanwhile, topics in the semiannual report are expected to be discussed in the House Financial Services Committee’s Semiannual Review of the Consumer Financial Protection Bureau at 10 a.m. Eastern March 7. The CFPB director typically testifies at these hearings.

If you would like to discuss legislative and regulatory issues with key policymakers, join ACA International’s advocacy staff May 14-16 in Washington, D.C. for the annual Washington Insights Fly-In. Registration is now open!

Read Kraninger’s complete semiannual report to Congress.

Related Content from ACA International:

ACA Members Host CFPB Director Kathy Kraninger and Staff

CFPB Proposes Changes to 2017 Payday Lending Rule

Transparency, Collaboration Needed in CFPB’s Data Collection Efforts

CFPB Acting Director Mick Mulvaney Recommends Statutory Changes in His Semiannual Report to Congress

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