The Consumer Financial Protection Bureau (CFPB) is withdrawing 67 rules and other guidance, including policies impacting the mortgage industry.
In a document filed on May 9 and published in the Federal Register this week, CFPB Acting Director Russell Vought noted that it is “the Bureau’s current policy to avoid issuing guidance except where necessary and where compliance burdens would be reduced rather than increased.”
While the withdrawn guidance is not necessarily final and certain items may be modified and reissued in the future, Vought noted that “the Bureau does not intend to prioritize the enforcement of such guidance against parties that do not conform to the guidance during the pendency of any withdrawal.”
Vought’s missive as CFPB director follows an April 11 request for information issued as part of his other job as director of the White House’s Office of Management and Budget (OMB). That RIF invited comments about ideas for deregulation of “any and all regulations currently in effect.”
The Mortgage Bankers Association (MBA) responded to the OMB’s request in a May 12 letter advocating for the rescission or revision of 15 regulations that impact the mortgage industry across several federal departments and agencies, including the CFPB.
“Overall, MBA supports the rulemaking process when it is used to provide clear rules of the road through a stable and informed process,” the association wrote. “However, agencies have occasionally promulgated rules that exceed their statutory authority and unnecessarily create significant costs or liability that affects credit availability.”
Among the CFPB rules earmarked for recission is a 2023 regulation that requires lenders to report certain data to the bureau on loans and other forms of credit to women-owned, minority-owned and small businesses.
The MBA advocated for recission of that rule, maintaining in its letter that the CFPB overstepped its bounds in implementing the regulation.
“Promulgating a rule that exceeds this requirement to include loans to finance income-producing investment properties does not further the goal of protecting small businesses,” the MBA letter stated.
A spokesperson for the MBA provided Scotsman Guide with a list of existing CFPB rules and guidance that the association had advocated for retaining, including guidance related to best practices for mortgage servicers and oversight of third-party service providers.
“It appears that all of those items were retained in the CFPB’s announced withdrawal last week, which we were pleased to see,” the MBA spokesperson stated.
Rob Nichols, president and CEO of the American Bankers Association (ABA), applauded the CFPB’s withdrawal of regulatory guidance in a statement released May 9.
“ABA has long expressed concern about the CFPB’s issuance of ‘guidance’ to advance its regulatory policy agenda, and we welcome the CFPB’s decision to withdraw a substantial amount of that guidance today,” Barber stated. “While banks welcome guidance that helps them understand and comply with the law, too often in the past the CFPB has characterized something as guidance that is actually a rule Congress requires to go through the notice-and-comment process.”
CFPB legal updates
The mass withdrawal of CFPB guidance comes during a busy week for the agency on the legal front.
On Tuesday, Reuters reported that the bureau canceled a 2023 settlement with the financing arm of Toyota Motor Corp. and scrapped a federal lawsuit against Walmart Inc. related to junk fees allegedly charged to delivery drivers. Those moves follow the abandonment in February of several mortgage-related lawsuits, including cases against Vanderbilt Mortgage and Finance and a division of Rocket Mortgage.
On Friday, a federal appeals court is set to begin hearing oral arguments in a case related to the CFPB’s attempts to lay off nearly 90% of its workforce.
