Pub. 10 2020-2021 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S www.coloradobankers.org 6 FEATURE ARTICLE T he challenges we have faced in 2020 have come at us out of nowhere and at a lightning pace. The world continues to face a global pandemic, while regulators and businesses are mainly reinventing significant industries. We have dealt with the Paycheck Protection Program, stimulus checks, mountains of loan modif ication requests, signif icant pushes to online services, and many other things that were not on our 2020 roadmap. With so many unexpected developments, it’s nice when we have the opportunity to anticipate some of the changes that will require us to take action. The Consumer Finance Protection Bureau (CFPB) has been busy during the last several months, and the next 12 months promise even more change. The CFPB recently published its Spring 2020 Agenda as part of the Trump administration’s Spring 2020 Unified Agenda of Federal Regulator y and Deregulator y Actions. The agency recapped some of its actions from recent months and gave us a preview of the regulatory roadmap through Spring 2021. Many of the changes follow up on proposals the agency had already announced. Changes are underway to the escrow requirements of higher-pricedmortgage loans (HPMLs). Under Section 108 of the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018 (EGRRCPA), Congress instructed the CFPB to conduct a rulemaking to exempt loans f rom the escrow requirements applicable to HPMLs if the lender has $10 billion or less in assets and meets other criteria. The CFPB published a notice of proposed rulemaking July 2 to implement Section 108 of the EGRRCPA. Comments are due by Sept. 21, 2020. As we enter into the fall, the CFPB plans to take a significant step toward implement ing sec t ion 1071 of the Dodd-Frank Act. Section 1071 requires lenders to identif y women-owned, minority-owned and small businesses and collect data related to the race, sex, and ethnicity of the business owners, the purpose of the loan, the action taken with regards to the loan, the business’s gross annual revenue, and “any additional data that the [CFPB] determines would aid in fulf illing t he pur poses of t h i s sec t ion.” In October, the CFPB will convene a panel under the Small Business Regulatory Enforcement Fairness Act to discuss this matter. Ahead of the event, the CFPB w i l l be releasing mater ia ls t hat t he g roup w i l l d i scus s w it h representatives of small entities likely to be directly affected by the Bureau’s rule to implement section 1071. The fall will also likely see two pr opo s a l s t o mod i f y t he Home Mortgage Disclosure Act (HMDA). The first proposal follows the May 2019 advance notice of proposed rulemaking concerning data points that banks must report under the 2015 HMDA rule and coverage of business or commercial purpose loans. The second proposal addresses the public disclosure of HMDA data in light of consumer privacy interests. In October, the CFPB expects to issue a final rule after the May 2019 proposed rule that would prescribe rules under Regulation F to govern t he ac t iv it ie s of debt col lec tor s. The proposed rule would address communications connected with debt collection; and interpret and apply prohibitions on harassment or abuse, false or misleading representations, and unfair practices in debt collection. The CFPB did not announce when it plans to take final action on its supplemental proposal issued in March 2020, which addressed time-barred debt disclosures. Finally, the CFPB is considering a proposed rule that would offer a new “seasoning” definition of Qualified Mortgages (QM). This definition would create an alternative pathway to QM safe-harbor status for mortgages when the borrower has consistently made timely payments for a period. This action would come on the heels of proposals to address the impending expiration of the Government-Sponsored Enterprises (GSE) Patch and amend the General QM def init ion in Regulat ion Z to replace the Debt-to-Income limit with a price-based approach. The comment periods for the existing proposals close on August 10 and September 8, respectively. BY CHRIS W. BELL , ASSOCIATE GENERAL COUNSEL CFPB Announces Its Spring Agenda