CFPB Adds Six New Items to Fall 2022 Rulemaking Agenda, Including Overdraft Fees, Fees for Insufficient Funds, and Credit Card Penalty Fees

The CFPB has published its Fall 2022 rulemaking agenda as part of the Fall 2022 Unified Agenda of Federal Regulatory and Deregulatory Actions.  The agenda’s preamble indicates that “[t]he Bureau reasonably anticipates having the regulatory matters identified [in the agenda] under consideration during the period from December 1, 2022 to November 30, 2023.”

The new agenda includes 6 new active rulemakings that did not appear on the Spring 2022 agenda.  Perhaps some possible “good news” here is that Director Chopra is listening to calls for him to use notice-and-comment rulemaking (including revisions to Official Staff Commentaries) to further his priorities instead of relying primarily on supervision and enforcement as well as a potpourri of other methods that lack the transparency and predictability of rulemaking.  While the agenda does not include any “larger participant” rulemaking, the CFPB is currently considering petitions urging it to engage in rulemaking to define larger participants in the market for personal loans and in the market for data aggregation services.  Other potential areas of rulemaking not included in the agenda are buy-now-later, earned wage access, and liability for peer-to-peer payment fraud.

The six new agenda items are:

• Registration of nonbanks subject to certain enforcement orders.  In December 2022, the CFPB issued a notice of proposed rulemaking (NPRM) released a proposed rule that would require certain “covered nonbanks” to register with and submit information to the CFPB when they become subject to certain orders from local, state, or federal agencies and courts involving violations of certain consumer protection laws.  The Bureau provides no estimated dates for further action on the NPRM.
  
  
• Registration of nonbanks regarding standard form contract terms and conditions.  The agenda item indicates that the CFPB is developing a proposed rule that would require supervised nonbanks to register with the Bureau and provide information about their use of certain terms and conditions in standard-form contracts.  The proposed rule would be focused on collecting information on non-negotiable standard terms or terms that are not prominently advertised in marketing.  Based on media reports about remarks given by Director Chopra at a September 2022 event, it appears that “forced” arbitration provisions are among the types of non-negotiated consumer contract terms that the CFPB has in mind.  With the Bureau designating the rulemaking to be in the “proposed rule stage” and giving a December 2022 estimate for issuance of a NPRM, it would appear that issuance of a NPRM is imminent. 
  
  
• Overdraft fees.  The agenda item indicates that the CFPB is considering whether to propose amendments to the Regulation Z overdraft rules.  Although the CFPB has continued to make overdrafts a supervisory focus under Director Chopra and he has warned that overdraft practices can result in UDAAP violations, the CFPB has previously been silent on whether it planned to engage in rulemaking on overdrafts.  The Bureau designates the rulemaking to be in the “prerule stage” and estimates pre-rule activity in November 2023.  (In the preamble, the CFPB indicates that it uses the November 2023 date for further activity on prerule stage items as a placeholder.)
  
  
• Fees for insufficient funds.  The agenda item indicates that the Bureau is considering new rules regarding NSF fees (but notes that lately some financial institutions have stopped charging NSF fees.)  Like overdraft fees, the CFPB has continued to make NSF fees a focus under Director Chopra but has not previously indicated that it planned to engage in rulemaking on NSF fees.  The Bureau designates the rulemaking to be in the “prerule stage” and estimates pre-rule activity in November 2023. 
  
  
• Credit card penalty fees.  The agenda item indicates that the CFPB is considering whether to propose amendments to the Regulation Z rules on credit card penalty fees that implement the CARD Act, including the penalty fees safe harbors.  In June 2022, the CFPB issued an ANPR regarding credit card late fees.  As the CFPB gives a January 2023 estimate for issuance of an NPRM, it would appear that issuance of a proposed rule on credit card penalty fees is also imminent.  An annual inflation adjustment for 2023 to the Regulation Z credit card safe harbor amounts was conspicuously missing from the other annual TILA adjustments announced by the CFPB in late December (which, in our view, represented an inexcusable delay).  Because no adjustments for 2023 were announced, the 2022 safe harbor amounts remain in effect.  The CFPB’s addition of rulemaking on credit card penalty fees to the new agenda supports our suspicion that the CFPB’s delay in announcing the 2023 adjustments was tied to the ANPR.
  
  
• Fair Credit Reporting Act rulemaking.  The agenda item indicates only that the Bureau is considering whether to amend Regulation V (which implements portions of the FCRA).  The Bureau designates the rulemaking to be in the “prerule stage” and provides no estimated dates for further rulemaking action.  The CFPB’s press release earlier this week about its annual report on consumer complaints submitted to the CFPB regarding Equifax, Experian, and TransUnion includes a statement from Director Chopra indicating that the CFPB “will be exploring new rules to ensure that the [three companies] are following the law, rather than cutting corners to fuel their profit model.”  We are not aware of any other statements from Director Chopra that shed light on the nature of the new rules he has in mind.  The Bureau designates the FCRA rulemaking to be in the “prerule stage” and estimates pre-rule activity in November 2023. 

As the agenda correctly indicates, this is the first time that the two nonbank registration rulemakings and the credit card penalty fees rulemaking have been included in the CFPB’s rulemaking agenda (which means although now designated as “proposed rule stage” items, the two nonbank registration rulemakings were never included in prior agendas as a “prerule stage” item or a long-term action).  The agenda incorrectly indicates that this is the first time that an overdrafts rulemaking has been included in the CFPB’s rulemaking agenda.  An overdraft fees rulemaking was previously designated as a “prerule stage” item in the CFPB’s rulemaking agendas under former Director Cordray.  In the CFPB’s Spring 2018 rulemaking agenda issued under former Acting Director Mulvaney, it was designated as an “inactive” item.” 

The four agenda items that previously appeared on the Spring 2022 agenda are:

• Small Business Lending Data.  Section 1071 of Dodd-Frank amended the ECOA, subject to rules to be adopted by the Bureau, to require financial institutions to collect and report certain data in connection with credit applications made by small businesses, including women- or minority-owned small businesses.  The Bureau issued a NPRM in August 2021 and the comment period ended on January 6, 2022.  The Bureau estimates issuance of a final rule in January 2023 (which would be in advance of the court-ordered March 31, 2023 deadline for issuing a final rule). 
  
  
• Personal Financial Data Rights (previously titled “Consumer Access to Financial Information”).  Section 1033 of Dodd-Frank addresses consumers’ rights to access information about their own financial accounts, and permits the CFPB to prescribe rules concerning how a provider of consumer financial products or services must make a consumer’s account information available to him or her, “including information related to any transaction, or series of transactions, to the account including costs, charges, and usage data.”  In November 2016, the Bureau issued a request for information  about market practices related to consumer access to financial information and, after holding a symposium in February 2020, the Bureau issued an ANPR in connection with its Section 1033 rulemaking in November 2020 and issued a SBREFA outline in October 2022.  The CFPB estimates that it will issue a SBREFA report in February 2023.
  
  
• Amendments to FIRREA Concerning Automated Valuation Models.  The Bureau is participating in interagency rulemaking with the Federal Reserve, OCC, FDIC, NCUA and FHFA to develop regulations to implement the amendments made by the Dodd-Frank Act to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) concerning appraisals.  The FIRREA amendments require implementing regulations for quality control standards for automated valuation models.  The Bureau released a SBREFA outline in February 2022 and a SBREFA report in May 2022.  It estimates that the agencies will issue a NPRM in March 2023.
  
  
• Property Assessed Clean Energy Financing.  In March 2019, the CFPB issued an ANPR to extend TILA ability-to-repay requirements to Property Assessed Clean Energy transactions.  The Bureau gives an April 2023 estimate for issuance of a NPRM.