CFPB Issues Three Interim Final Rules on Consumer Financial Protection Laws

The Consumer Financial Protection Bureau (CFPB) continues to flex its regulatory muscles under the Dodd-Frank Act. Last week the CFPB divested the Federal Trade Commission of its rulemaking authority from various consumer protection laws, as discussed here. Today, the CFPB issued three additional interim final rules transferring consumer financial protection functions” previously granted to other Federal agencies. Again, these rules duplicate existing regulations, making only technical and non-substantive changes, and do not impose any new substantive obligations on regulated entities.

Proposed Regulation C”: Home Mortgage Disclosure Act (HMDA) (76 FR 78465)

The HMDA requires most mortgage lenders located in metropolitan areas to collect data about their housing-related lending activities. Lenders must then report this data annually and make it publicly available. This rule transfers all rulemaking authority under the Act to the CFPB and identifies it as the appropriate Federal agency to whom financial institutions are to submit their reports. The CFPB indicates that substantive changes made to the HDMA under the Dodd-Frank Act requiring the submission of additional lending information will be addressed in a future rulemaking.

Proposed Regulations G&H”: S.A.F.E. Mortgage Licensing Act - Federal Registration of Residential Mortgage Loan Originators, and State Compliance and Bureau Registration Systems (76 FR 78483)

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act) provides for the licensing and/or registration of mortgage loan originators. The S.A.F.E. Act additionally requires states to adopt minimum standards for licensing residential mortgage loan originators. Prior to this proposed rule, the Department of Housing and Urban Development (HUD) was charged with overseeing and enforcing states’ compliance under the Act. This rule now divests HUD and various banking institutions of this authority and transfers all regulatory and enforcement power to the CFPB.

Proposed Regulation M”: Consumer Leasing Act (CLA) (76 FR 78500)

The CLA provides for the meaningful and accurate disclosure of the terms of personal property leases for personal, family, or household use. Regulation M specifically requires lessors to provide consumers with uniform costs and other disclosures about consumer lease transactions. This rule transfers to the CFPB all rulemaking authority under the Act which was originally vested in the Board of Governors of the Federal Reserve System.

All three interim final rules have an effective date of December 30, 2011. Affected businesses are strongly encouraged to submit their comments before the deadline on February 17, 2012.