The Consumer Financial Protection Bureau is planning to issue rulemaking to supervise payday lenders, overdraft fees and debt collection as part of its packed agenda this year.
The agency posted its semiannual rulemaking agenda on a blog late Wednesday updating the next steps it will take in several areas of rulemaking. It expects to issue rules for prepaid reloadable cards, mortgage servicing and mortgage disclosures this summer.
The CFPB has not set specific deadlines to issue proposals on overdraft and debt collection, but analysts expect so-called pre-rulemaking activities, typically a report or a small-business review panel, in both areas this summer as well.
The CFPB plans to release its highly anticipated formal proposal to restrict payday lending on June 2 at a public hearing in Kansas City, Mo.
Ed Mills, a policy analyst at FBR Capital Markets, said he expects pre-rulemaking on debt collection in June, instead of February, and on overdraft services in August, instead of January.
Overdraft fees and debt collection affect far more consumers than payday lending, but rulemaking on payday lending is likely to have a far bigger impact on the industry's current business model, he said.
"The CFPB is very much focused on the short-term, small-dollar credit space and is taking a holistic look at all the ways that an individual interacts with financial institutions," Mills said. "Part of why [the rulemaking] is taking so long is that they are trying to ensure there isn't a regulatory arbitrage of consumer protections."
The CFPB also is continuing rulemaking that would define larger participants in the installment and vehicle title lending market, and is considering whether rules should require registration of such firms. The CFPB is expected to propose rules on installment and vehicle title lending in December that could be finalized by mid-to-late 2017, Mills said.
The bureau expects to issue a final rule this summer on prepaid reloadable cards that consumers often use in lieu of a checking account. Analysts had initially expected the rule would be issued in March.
The CFPB also plans to issue a final rule this summer to amend mortgage servicing rules that took effect in 2013. The rules would amend a proposal published in 2014 to address certain aspects of loss mitigation and compliance with rules when a borrower is in bankruptcy or is a successor in interest.
Additionally, the CFPB plans this summer to offer clarifications and guidance to its "Know Before You Owe" mortgage disclosure rule, known in the industry as TRID, which went into effect Oct. 3. Lenders have complained that the rules have generated confusion and uncertainty in the mortgage market.
The CFPB said it is in the "very early stages" of rulemaking that would establish requirements for lenders to report data on loan applications made by women-owned, minority-owned businesses and small businesses.
The CFPB has not set a deadline for the small-business data collection, though Mills expects a rulemaking in December, pushed back from September, though a final rule likely is years away. A rule on small-business data collection likely would increase reporting costs at banks. The data also could be used by the bureau to take enforcement actions or develop new regulations to prevent discrimination in lending.