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Compliance Update - March 31, 2023
NBA, Banking Associations Push Back on Opening Up Federal Home Loan Bank System
The Federal Housing Finance Agency (FHFA) is in the process of reviewing the Federal Home Loan Bank (FHLB) system. The NBA and 51 state and territorial banking associations recently wrote a joint letter to the agency highlighting the importance of the FHLB system and pushing back on suggestions to open it up to new entities for limit access based on bank size. The associations argued that doing so could destabilize the FHLB system and put existing members' capital at risk. They also urged that FHLB members be included in any discussions on increased mandates for affordable housing and community development.
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CFPB Finalizes Small Business Data Collection Rule
The Consumer Financial Protection Bureau (CFPB) released its final rule implementing Section 1071 of the Dodd-Frank Act, which requires financial institutions to collect and report credit application data for small businesses, including women-owned and minority-owned small businesses. Lenders that made at least 2,500 small business loans in both 2022 and 2023 must start collecting data on October 1, 2024, while those that made at least 500 loans but fewer than 2,500 loans in both years must begin data collection by April 1, 2025. Lenders that made at least 100 loans but fewer than 500 loans in both 2022 and 2023 must start collecting data on January 1, 2026.
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CFPB Defines Illegal Abusive Acts in Proposed Guidance
The CFPB issued proposed guidance on the "abusiveness" standard defined by the Consumer Financial Protection Act. Notably, the CFPB asserts that the prohibition on abusiveness includes acts or practices that obscure, withhold or hide information relevant to consumers' understanding of terms and conditions. The agency also notes that institutions may not take unreasonable advantage of consumers' lack of understanding or reasonable reliance on them. Comments on the guidance are due by July 3.
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