CFPB: COVID-19 Leads to Flexibility from Lenders and from Regulators

The Consumer Financial Protection Bureau (CFPB), along with its state and federal partners, are relaxing some regulatory requirements for financial institutions in order to encourage them to focus on helping consumers during this pandemic.

The CFPB has postponed certain mandatory reporting of data from financial institutions. For example, certain mortgage lenders will not be required to report quarterly information in accordance with the Home Mortgage Disclosure Act and Regulation C. The CFPB also has postponed reporting of information relating to credit cards and prepaid accounts under the Truth in Lending Act, Regulation Z, and Regulation E, including quarterly submission of consumer credit card agreements, agreements between credit card issuers and higher educational institutions, and submission of prepaid account agreements. To the extent any such information is subject to mandatory reporting during this time, the CFPB has announced it will not cite any infractions during examinations or initiate any enforcement actions relating to those issues. More information on this release is available here.

Separately, on April 1, 2020, the CFPB issued a policy statement announcing the Bureau’s flexible approach to credit reporting and furnishing of consumer credit information. The statement covered two concerns. First, the statement noted that continued furnishing of consumer information is necessary to maintain confidence in the consumer reporting industry. To that end, the CFPB noted that it expects furnishers of credit information to comply with the CARES Act requirement that furnishers report as “current” all consumer payments made pursuant to accommodation payments arranged between lenders and borrowers. But the CFPB expressed the importance of furnishing accurate information to consumer reporting agencies and announced it will not cite in any examination or take enforcement action against a furnisher that provides such accurate information. Although not defined in the statement, presumably the CFPB is referring to information that augments the “current” notation with further note of the fact of an accommodation, amount of reduction, deferment of a particular payment, or the like.  Nonetheless, furnishers should be cautious in furnishing of information beyond “current.”  Second, the statement announced some relief regarding the statutory time period during which consumer reporting agencies and furnishers must investigate consumer disputes regarding a consumer report (by statute, typically within 30 days after receipt of the dispute). Because the business of furnishing and reporting of consumer reports has been disrupted by COVID-19, the Bureau will not cite in an examination or bring an enforcement action against companies that make “good faith efforts to investigate disputes as quickly as possible, even if dispute investigations take longer than the statutory timeframe.” More information on the CFPB’s policy statement is available here.

If you have any questions, please contact Ice Miller’s Financial Services Litigation team.

 

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.