Chopra: CFPB Wants to Change Nature of Regulations

The CFPB is seeking to move away from highly complicated rules that have long been a staple of consumer financial regulation and toward simpler and clearer rules, said CFPB Director Rohit Chopra in a recent Bureau Blog article. In addition, the CFPB is dramatically increasing the amount of guidance it is providing to the marketplace, in accordance with the same principles.

The Bureau is also reviewing a host of rules that the agency inherited from other agencies, including the Federal Reserve Board of Governors and the Federal Trade Commission, as well as other rulemakings the CFPB pursued in its first decade of existence. Many of these rules have now been tested in the marketplace for many years and need a fresh look. These reviews include:

• Rules originally developed by the Federal Reserve Board of Governors under the Credit CARD Act of 2009, including the enforcement immunity and inflation provisions when imposing penalties on customers.
• Rules originally developed by the Federal Trade Commission to implement the Fair Credit Reporting Act to identify potential enhancements and changes in business practices.
• The CFPB’s Qualified Mortgage Rules to explore ways to spur streamlined modification and refinancing in the mortgage market, as well as assessing aspects of the “seasoning” provisions.

With respect to guidance, the CFPB will increase its interpretation of existing law to the marketplace. The CFPB’s Advisory Opinion program, launched in 2020, is a way to quickly provide interpretive rules so the industry can better understand the rules of the road.

The CFPB also plans to promote consistency among enforcers through Consumer Financial Protection Circulars. This new form of guidance document is specifically directed to the broad set of government agencies responsible for enforcing federal consumer financial law, including other federal regulators and state and tribal attorneys general and regulators across the country. These circulars seek to provide greater clarity to financial institutions by encouraging consistent enforcement among government agencies of laws passed by Congress.