The Consumer Financial Protection Bureau (CFPB) rescinded seven policy statements issued last year that provided temporary flexibilities to financial institutions during the pandemic.
The rescinded policy statements – issued between March 26 through June 3 of last year – were designed to provide financial institutions with flexibility regarding certain regulatory filings or compliance with consumer financial laws and regulations. In rescinding them, the Bureau said the financial institutions have had a year to adapt their operations to the difficulties posed by the pandemic.
“We are now over a year into the disruptive and deadly COVID-19 crisis. The virus has affected industry as well as consumers, but individuals and families have been hardest-hit by the pandemic’s health and economic impacts,” CFPB Acting Director Dave Uejio said. “Providing regulatory flexibility to companies should not come at the expense of consumers. Because many financial institutions have developed more robust remote capabilities and demonstrated improved operations, it is no longer prudent to maintain these flexibilities.”
The seven rescinded policy statements include Bureau Supervisory and Enforcement Response to COVID-19 Pandemic; Supervisory and Enforcement Practices Regarding Quarterly Reporting Under the Home Mortgage Disclosure Act; Supervisory and Enforcement Practices Regarding CFPB Information Collections for Credit Card and Prepaid Account Issuers; Supervisory and Enforcement Practices Regarding the Fair Credit Reporting Act and Regulation V in Light of the CARES Act; Supervisory and Enforcement Practices Regarding Certain Filing Requirements Under the Interstate Land Sales Full Disclosure Act (ILSA) and Regulation J; Supervisory and Enforcement Practices Regarding Regulation Z Billing Error Resolution Timeframes in Light of the COVID-19 Pandemic; and Supervisory and Enforcement Practices Regarding Electronic Credit Card Disclosures in Light of the COVID-19 Pandemic.
The changes took effect on April 1. Several industry groups took exception to some of the changes.
“This announcement ignores the reality facing banks across the country. Hundreds of thousands of bankers continue to work from home and need the flexibility to protect customers remotely. While our institutions continue to comply with the law, revoking this flexibility in the final stages of this pandemic is not the answer. The Bureau should be looking for ways to ensure banks can better serve consumers and small businesses as we all work towards the other side of this public health crisis – not hamstring them with 24-hour notices,” Consumer Bankers Association President and CEO Richard Hunt said.
The Credit Union National Association (CUNA) also came out against the CFPB’s actions.
“It’s disappointing the CFPB chose to rescind several temporary COVID-19 policy statements while the pandemic continues to affect the finances of millions of consumers. This kind of unilateral action, taken without the benefit of notice or an opportunity to provide feedback, reduces flexibility and undermines the Bureau’s own appeal for service providers to make sizeable accommodations for consumers. Regardless, credit unions will continue to assist members in need as they have done throughout the duration of the pandemic,” Chief Advocacy Officer Ryan Donovan said.