Pub. 10 2020 Issue 3

11 PUB. 10 2020 ISSUE 3 that would prescribe rules under Regulation F to govern debt collectors activities. The proposed rule would address communica- tions connected with debt collection; and interpret and apply prohibitions on harass- ment or abuse, false or misleading represen- tations, and unfair practices in debt collec- tion. The CFPB did not announce when it plans to take final action on its supplemental proposal issued in March 2020, which ad- dressed time-barred debt disclosures. Finally, the CFPB considers 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 consis- tently made timely payments. This action would come on the heels of proposals to address the impending expiration of the Government-Sponsored Enterprises (GSE) Patch and will amend the General QM definition in Regulation 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. The CFPB also discussed its participation in the interagency rulemaking processes to update the guidelines issued by Finan- cial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). This partnership with the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Federal Housing Finance Agency is developing regulations to implement the amendments made by the Dodd-Frank Act to the FIRREA guidelines concerning ap- praisals. The changes require implementing regulations for quality control standards for automated valuation models (AVMs). One of the items listed in the preamble to the CFPB’s Spring Agenda that has not gen- erated much attention is the agency’s study of the impact of artificial intelligence (AI) in the context of Federal consumer financial laws and regulations. Banks raised issues related to AI in response to the CFPB’s 2017 Request for Information Regarding Use of Alternative Data and Modeling Techniques in the Credit Process, the Bureau’s 2018 Calls for Evidence, and other outreach since then. The Bureau continues to monitor AI developments and is evaluating whether rulemaking, a policy statement or other action may be appropriate. With the OCC’s recent proposal regarding technological innovation, it would not be surprising to see the CFPB announce something on this topic in the near future. 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. Chris W. Bell is an Associate General Counsel at Compli- ance Alliance. He has worked in the legal department of a federal savings bank and for the Texas Department of Banking. He is one of the C/A hotline advisors. To fulfill its obligation under Section 1022(d) of the Dodd-Frank Act, the CFPB is also conducting its five-year review of its Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lend- ing Act (Regulation Z) Rule and certain amendments. The CFPB announced it plans to issue its TRID Rule assessment report by October. The CFPB also expects to conduct an additional review under section 610 of the Regulatory Flexibility Act, which requires the Bureau to consider the effect on small entities of the rules it promulgates. The agency plans to review the Regulation Z rules that implement the Credit Card Ac- countability Responsibility and Disclosure Act of 2009. Stay tuned to Compliance Alliance for announcements on these developments and more. w