United States: CFPB Key Regulatory Initiatives Targeted For 2024

The CFPB's latest regulatory agenda signals that the Bureau expects final rules on several key regulatory initiatives to move forward in the next several months. The agenda lists the regulatory matters that the CFPB reasonably anticipates, as of August 17, 2023, it will have under consideration during the period from November 1, 2023, to October 31, 2024, as described in the excerpts below from the Agency Rule List - Fall 2023.

• Credit Card Penalty Fees (Final Rule/December 2023): "Section 149 of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 is implemented in part in Regulation Z, section 1026.52(b). Currently, under Regulation Z, section 1026.52(b)(1), a card issuer must not impose a fee for violating the terms or other requirements of a credit card account, including a late payment, unless the issuer has determined that the dollar amount of the fee represents a reasonable proportion of the total costs incurred by the issuer for that type of violation consistent with section 1026.52(b)(1)(i) or complies with the safe harbor amounts consistent with section 1026.52(b)(1)(ii). On June 22, 2022, the CFPB issued an advance notice of proposed rulemaking (ANPRM) seeking information from credit card issuers, consumer groups, and the public regarding credit card late fees and late payments, and card issuers' revenue and expenses. On February 1, 2023, the CFPB proposed to (1) adjust the safe harbor dollar amount for late fees to $8 and eliminate a higher safe harbor dollar amount for late fees for subsequent violations of the same type; (2) provide that the current provision that provides for annual inflation adjustments for the safe harbor dollar amounts would not apply to the late fee safe harbor amount; and (3) provide that late fee amounts must not exceed 25 percent of the required minimum payment."
• Registry of Supervised Nonbank That Use Form Contracts to Impose Terms And Conditions That Seek To Waive Or Limit Consumer Legal Protection (Final Rule/March 2024): "On February 1, 2023, the CFPB proposed a rule that would require certain supervised nonbank entities to register with the CFPB and provide information about their use of certain terms and conditions in standard-form contracts for consumer financial products or services that seek to waive or limit consumer rights or legal protections. In particular, the proposed rule would collect information on these standard terms and conditions used in form contracts that are not subject to negotiation. Under the proposal, the CFPB would establish a publicly accessible registry that identifies registrants and, subject to applicable law, publish information that registrants submit to the registry about their use of covered terms and conditions."
• Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders (Final Rule/March 2024): "On January 30, 2023, the CFPB proposed a rule under its authorities at 12 U.S.C. 5512(b) and (c) and 5514(b) that would require certain nonbank covered persons that are under certain final public enforcement orders to register with the CFPB via a public registry that the CFPB would create for such purposes; to submit copies of public orders to the same; and, where certain such persons are supervised by the CFPB, to prepare and submit written statements regarding such orders for use in connection with the CFPB's supervisory functions. The public registry created by the CFPB would identify institutions subject to registration and include public enforcement orders and information regarding those orders."
• Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders (Final Rule/March 2024): "On January 30, 2023, the CFPB proposed a rule under its authorities at 12 U.S.C. 5512(b) and (c) and 5514(b) that would require certain nonbank covered persons that are under certain final public enforcement orders to register with the CPFB via a public registry that the CFPB would create for such purposes; to submit copies of public orders to the same; and, where certain such persons are supervised by the CFPB, to prepare and submit written statements regarding such orders for use in connection with the CFPB's supervisory functions. The public registry created by the CFPB would identify institutions subject to registration and include public enforcement orders and information regarding those orders."
• Property Assessed Clean Energy Financing (Final Rule/November 2024): "Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) amended the Truth in Lending Act (TILA) to require the CFPB to prescribe regulations relating to "Property Assessed Clean Energy" (PACE) financing. As defined in EGRRCPA section 307, PACE financing results in a tax assessment on a consumer's real property and covers the costs of home improvements. The required regulations must carry out the purposes of TILA's ability-to-repay (ATR) requirements, currently in place for residential mortgage loans, with respect to PACE financing, and apply TILA's general civil liability provision for violations of the ATR requirements the CFPB will prescribe for PACE financing. The EGRRCPA directs that such requirements account for the unique nature of PACE financing and specifically authorizes the collection of data and information necessary to support a PACE rulemaking. In March 2019, the CFPB issued an Advance Notice of Proposed Rulemaking (ANPRM) on PACE financing to facilitate the CFPB's rulemaking process. In May 2023, the CFPB issued a proposed rule to implement EGRRCPA section 307 and make other adjustments to Regulation Z to account for the unique nature of PACE financing."

In addition, the CFPB is engaged in pre-rule activity on certain topics, including Fair Credit Reporting Act Rulemaking, Overdraft Fees; Rulemaking on Personal Financial Data Rights; Mortgage Servicing, Fees for Insufficient Funds; Financial Data Transparency Act; Amendments to FIRREA Concerning Automated Valuation Models; and Supervision of Larger Participants in Consumer Payment Markets. For more on these pre-rule related activities, see the CFPB Fall Regulatory Agenda, available here.

And in the CFPB's long-term agenda are potential revisions to Regulation DD, which implements the Truth in Savings Act (TISA) and requires the clear and uniform disclosure of the rates of interest that are payable on deposit accounts by depository institutions, and the fees that are assessable against deposit accounts, so that consumers can make a meaningful comparison among the competing claims of depository institutions with regard to deposit accounts. No date is specified for activity on Regulation DD.

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