Updates to CFPB Rulemaking Agenda
June 3, 2014
June 03, 2014
The Consumer Financial Protection Bureau (CFPB) recently published a semi-annual update of the rulemaking agenda. Under the Regulatory Flexibility Act, federal agencies are required to publish their regulatory agendas twice a year. The CFPB has been doing this for a couple of years by voluntarily participating in the Office of Management and Budget’s Unified Agenda.
The CFPB’s regulatory agenda includes rulemaking actions in various stages. The most common rulemaking stages in the Unified Agenda are: pre-rule, proposed rule, and final rule. The pre-rule stage indicates areas of interest for the CFPB. It may not necessarily indicate any formal action, but generally does indicate that the CFPB is considering publishing a proposed rule or is gathering information from stakeholders.
The CFPB’s rulemaking agenda covers a number of different items.
The agenda includes a Dodd-Frank requirement to add additional pieces of information to be gathered for HMDA reporting. The new items could include information on lending to minority and female owned businesses. These changes are still in the pre-rule stage and there is currently no date set for a proposed rule to be issued.
The CFPB is also working on several changes to address questions that have arisen from the 2013 mortgage rules, and continues to work on the implementation process of the combined TILA/RESPA disclosure requirement.
In June 2013, the CFPB issued a white paper summarizing the Bureaus’ initial findings from its analysis of overdraft practices. The white paper highlighted a number of possible consumer protection concerns, including how consumers opt in to overdraft coverage for ATM and one-time debit card transactions, overdraft coverage limits, transaction posting order, overdraft and insufficient funds fee structure, and involuntary account closures. The CFPB is considering whether rules governing overdraft and related services are warranted, and, if so, what types of rules would be appropriate. Possible rulemaking might include disclosures or address specific acts or practices.
Defining larger participants
The CFPB continues to implement its supervisory program for certain nonbank entities by defining “larger participants” in various markets for consumer financial products and services.
The agenda shows a final rule stage for larger participants of the International Money Transfer Market, and a newly released proposed rule stage for later participants in a market for auto lending.
Debt collection and consumer complaints about debt collection continue to be an area of interest for the CFPB. The Bureau issued an ANPR seeking comment, data, and information about possible changes to the Fair Debt Collection Practices Act (FDCPA).
The CFPB is expected to build on its ANPR from 2012 regarding prepaid cards and is considering issuing a proposed rule to strengthen and extend federal consumer protection to these products. The Bureau has been testing potential disclosures that may be proposed to be used on the packaging of prepaid cards.
Payday/Deposit Advance loans
In April 2013, the CFPB issued a white paper summarizing the CFPB’s initial findings from its analysis of payday loan and deposit advance products. The white paper highlighted a number of consumer protection concerns, including consumers’ “sustained use” of these short-term, high-cost products. The CFPB is considering whether rules governing these products are warranted under CFPB authorities, and if so what types of rules would be appropriate. Rulemaking might include disclosures or address acts or practices in connection with these products.
Question of the Week
Can a credit union open a share account for someone who only has an ITIN and not a Social Security Number?
Yes. The NCUA encourages credit unions to serve individuals who are within the field of membership regardless of citizenship and regardless of whether they have a social security number.
An ITIN (individual taxpayer identification number) is a tax processing number issued by the Internal Revenue Service. It is a nine digit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX. IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA). ITINs are issued regardless of immigration status because both resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code. Individuals must have a filing requirement and file a valid federal income tax return to receive an ITIN, unless they meet an exception.
Once this person is a member, he or she is entitled to all the services and products available to all other members.
It is also important to obtain other verification documents as part of your due diligence. ITINs are not valid identification outside the tax system. Since ITINs are strictly for tax processing, IRS does not apply the same standards as agencies that provide genuine identity certification. ITIN applicants are not required to apply in person, and the IRS does not further validate the authenticity of identity documents. ITINs do not prove identity outside the federal tax system, and should not be offered or accepted as identification for non-tax purposes.
Beginning on January 1, 2013, ITINs issued on or after January 1, 2013 will expire on December 31st five years after the ITIN was issued. ITINs issued prior to January 1, 2013 are not affected.
National Credit Union Administration (NCUA)
The NCUA, along with several other federal agencies, released a bulletin on the increased maximum flood insurance coverage for “other residential buildings.”
Consumer Financial Protection Bureau (CFPB)
CFPB Director Cordray delivered prepared remarks at the Financial Literacy and Education Committee Meeting.
Financial Crimes Enforcement Network (FinCEN)
FinCEN issued an updated advisory to financial institutions regarding the use of “funnel accounts” as part of money laundering schemes.
Federal Reserve Board (FRB)
The FRB has submitted its 2014 Annual Performance Plan to Congress.
Financial Industry Regulatory Authority (FINRA)
FINRA issued an investor alert warning investors of too good to be true certificates of deposits.
Bureau of Engraving and Printing
The Bureau of Engraving and Printing has issued an interim final rule that makes amendments to its regulations regarding the exchange of mutilated paper currency.
Federal Deposit Insurance Corporation (FDIC)
The FDIC has released its spring 2014 edition of FDIC Consumer News.
The FDIC released its First Quarter 2014 banking profile.
Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of May 30, 2014. The last update prior to this was May 23, 2014.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.