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CFPB Outlook Under Biden

  • Upon taking office, President-Elect Joe Biden is expected to appoint a new acting director at the CFPB. He will then nominate someone to go through the US Senate confirmation process. It’s likely that his choice will be an individual with the same heft as the person who typically holds the position of US Securities and Exchange Commission (SEC) Division of Enforcement director.
  • Once under new leadership, the CFPB will abolish or reconstitute the agency’s Task Force on Consumer Financial Law.
  • Director Kathleen Kraninger’s recent effort to reorganize the CFPB’s Supervision, Enforcement, and Fair Lending (SEFL) Division has been shelved (at least temporarily), which means that any reorganization will likely be decided by the bureau’s new leadership.

WHAT’S ON THE AGENDA

  • It’s likely that President-Elect Biden will reverse many of the rules and guidance policies put in place by CFPB Acting Director Mick Mulvaney/Director Kraninger. This can be done without much difficulty through the CFPB’s regulatory process and will not require legislation. Included in this effort will be a resumption in rulemaking governing everything from overdrafts to readopting a strict payday lending rule. The final rule issued at the end of October 2020 that allows debt collectors to engage with borrowers over a broader range of communication channels than before – including digital ones – will likely be revised under the new administration. 
  • President-Elect Biden has proposed the creation of a Public Credit Reporting Agency within the CFPB to compete with the three credit bureaus that will employ algorithms that will not result in discrimination and use nontraditional data sources, such as utility bill payments.
  • The new CFPB will also re-examine debt validation or “ability to repay” determinations.
  • President-Elect Biden will focus on softening the economic impact of the coronavirus (COVID-19) pandemic on households and more aggressively police Wall Street. The federal CARES Act relief law extended certain protections to homeowners and renters and the CFPB will probably step in more closely to monitor businesses and make sure consumers aren’t pushed further into distress (i.e., avoid evictions and vehicle repossessions, reduce loan delinquencies and defaults, and monitor debt collectors and credit reporting agencies). Mortgage-related investigations are going to be laser-beam focused on COVID-19-related issues, and what servicers are doing to help and not harm consumers during this time.To read more click here

Guide to Post-Judgment Collections

“Congratulations, we won! …now what?” — anonymous litigator

In the hectic world of North Carolina civil litigation, the focused practitioner understandably may lose sight of the forest for the individual trees. Analyzing thousands of pages of poorly-copied document production for that smoking-gun email, determining just the right dollar amount for your client’s twelfth counteroffer to keep the adverse party engaged in settlement efforts, and speed-reading opposing counsel’s summary judgment brief which was hand-delivered to you 30 seconds before the hearing started; such tasks lend themselves to intense focus, not an appreciation for the “bigger picture.” Yet, when the fortunate litigator does succeed in obtaining a civil judgment, whether by settlement, motion, verdict, or sheer luck, she is quickly confronted with the inevitable question from the client: how do we magically turn this paper judgment into gold?

To assist those with less experience in the alchemy of post-judgment collections, we present the following general formula for catalyzing the conversion of your client’s paper judgment into something of tangible value (debt collection).

Preparing Your Laboratory: Debtor’s Exemptions
In order to get to judgment execution, the initial ingredient in the post-judgment collections formula, the judgment creditor must first (1) wait for the time to file a notice of appeal has expired, which is thirty (30) days from entry of judgment (tip: be sure to serve all parties with copies of the entered judgment under NCRCP 58 to get this clock started!), and (2) deal with the issue of exemptions.

A corporate (non-human) judgment debtor has no exemptions. If your debtor is a corporate entity, proceed to Step 2. To read more click here

Ending Operation Choke Point Proposed Rule Comments Needed by Jan 1, 2021

The Office of the Comptroller of the Currency is proposing a regulation to ensure that national banks and Federal savings associations offer and provide fair access to financial services. DATES: Comments must be received on or before January 4, 2021. ADDRESSES: Commenters are encouraged to submit comments through the Federal eRulemaking Portal, if possible. Please use the title “Fair Access to Financial Services” to facilitate the organization and distribution of the comments.

You may submit comments by any of the following methods: • Federal eRulemaking Portal – Regulations.gov Classic or Regulations.gov Beta. Regulations.gov Classic: Go to https://www.regulations.gov/. Enter “Docket ID OCC-2020- 0042” in the Search Box and click “Search.” Click on “Comment Now” to submit public comments. For help with submitting effective comments, please click on “View Commenter’s Checklist.” Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov, including instructions for submitting public comments. 2 Regulations.gov Beta: Go to https://beta.regulations.gov/ or click “Visit New Regulations.gov Site” from the Regulations.gov classic homepage. Enter “Docket ID OCC-2020-0042” in the Search Box and click “Search.” Public comments can be submitted (1) via the “Comment” box located below the displayed document information or (2) by clicking on the document title and then clicking on the “Comment” box on the top-left side of the screen. For help with submitting effective comments, please click on “Commenter’s Checklist.”

For assistance with the Regulations.gov Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 MondayFriday, 9am-5pm ET. or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.. • Mail: Chief Counsel’s Office, Attention: Comment Processing, Office of the Comptroller of the Currency, 400 7th Street, SW., suite 3E-218, Washington, DC 20219. • Hand Delivery/Courier: 400 7th Street, SW., suite 3E-218, Washington, DC 20219. Instructions: You must include “OCC” as the agency name and “Docket ID OCC-2020-0042” in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the Regulations.gov website without change, including any business or personal information provided such as name and address information, e-mail addresses, and phone numbers. Comments, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.

You may review comments and other related materials that pertain to this rulemaking action through Regulations.gov Classic or Regulations.gov Beta. Regulations.gov Classic: Go to https://www.regulations.gov/. Enter “Docket ID OCC-2020- 0042” in the Search box and click “Search.” Click on “Open Docket Folder” on the right side of 3 the screen. Comments and supporting materials can be viewed and filtered by clicking on “View all documents and comments in this docket” and then using the filtering tools on the left side of the screen. Click on the “Help” tab on the Regulations.gov home page to get information on using Regulations.gov. The docket may be viewed after the close of the comment period in the same manner as during the comment period. Regulations.gov Beta: Go to https://beta.regulations.gov/ or click “Visit New Regulations.gov Site” from the Regulations.gov classic homepage. Enter “Docket ID OCC 2020-0042” in the Search Box and click “Search.” Click on the “Comments” tab.

Comments can be viewed and filtered by clicking on the “Sort By” drop-down on the right side of the screen or the “Refine Results” options on the left side of the screen. Supporting materials can be viewed by clicking on the “Documents” tab and filtered by clicking on the “Sort By” drop-down on the right side of the screen or the “Refine Results” options on the left side of the screen. For assistance with the Regulations.gov Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 MondayFriday, 9am-5pm ET or e-mail This email address is being protected from spambots. You need JavaScript enabled to view it.. The docket may be viewed after the close of the comment period in the same manner as during the comment period. FOR FURTHER INFORMATION CONTACT: Karen McSweeney, Special Counsel, or Emily Boyes, Counsel, Chief Counsel’s Office, (202) 649-5490, Office of the Comptroller of the Currency, 400 7th Street, SW., Washington, DC 20219. To read the proposed rule click here.

10 Key Takeaways From California’s New Consumer Finance Enforcement Regime

Three California laws that affect fintech companies will go into effect on January 1, 2021. The California Consumer Financial Protection Law (CCFPL) expands the scope of the Department of Business Oversight’s (DBO) current regulatory and enforcement powers, and renames it as the Department of Financial Protection and Innovation (DFPI). The Debt Collection Licensing Law (DCLL) requires, among other things, that persons engaged in the collection of consumer debts, including first- and third-party debt collectors and debt buyers, obtain a license from the DFPI. The Student Loan Borrower Bill of Rights gives the DFPI broader authority to regulate student loan servicers, including depository institutions and servicers of federal student loans, in addition to providing consumers with a private right of action to enforce the law’s substantive requirements.

For example: The DFPI Will Have the Resources to Hit the Ground Running California will appropriate at least $10 million in additional funding to the DFPI each of the next three fiscal years. Beginning in the 2023-24 budget cycle, the DFPI will be funded exclusively through the licensing fees discussed above and from the civil penalties it collects in connection with enforcement actions. This funding mechanism gives the DFPI the ability to act quickly and the incentive to utilize its enforcement powers. The DFPI’s self-funding mechanism also insulates the agency from pressure that otherwise could have been brought to bear on the agency through the political process. To read more click here

 

Debt Collection Rule Implementation Guides from CFPB

Two weeks ago, the Bureau released the Debt Collection Final Rule. With the rule, the Bureau also began releasing compliance aids to assist industry. As the implementation period for the final rule progresses, the Bureau will continue to provide more compliance aids.

To provide more clarity and transparency on how the Bureau provides assistance during the implementation period, the Bureau has developed resources that provides an overview of the Regulatory Implementation and Guidance (RIG) team at the Bureau, the RIG team’s strategy for providing assistance to industry, and instructions for how to find compliance aids related to the Debt Collection Final Rule. To access click here

It also provides a link to the Bureau’s Debt Collection compliance aid resource webpage, your dedicated access point to Debt Collection materials such as compliance aids, supervisory guidance, and any subsequent rules the Bureau publishes regarding debt collection including exam procedures. To access click here

Additionally, the Bureau has developed a listserv dedicated to updates about the Debt Collection Rule. Subscribers will receive Bureau emails when additional rules or compliance aid materials related to debt collection are published.  

You can access the implementation period resource guide here: 

You can sign-up to receive email updates about the Debt Collection Rule click here.