All Things FinReg

The US Supreme Court ruled on May 16, 2024 that the funding structure of the Consumer Financial Protection Bureau (CFPB)—which is funded with money from the Federal Reserve rather than the US Congress—does not run afoul of the Appropriations Clause of the US Constitution. The Court’s decision reversed the Fifth Circuit’s ruling that the CFPB’s funding structure was unconstitutional and put a definitive end to the last pending wholesale challenge to the CFPB’s constitutionality.

Financial services is perhaps the most regulated industry in the world, and the intersection between financial services, technology, and law remains a complicated and evolving space. A team of Morgan Lewis lawyers recently attended the 2023 Money 20/20 conference and previewed some major themes and trends that the industry can expect in 2024.

On April 27, 2021, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a final rule formally delaying the mandatory compliance date for the rule defining a “qualified mortgage” (QM) (the General QM Final Rule) from July 1, 2021 to October 1, 2022.

The Consumer Financial Protection Bureau (CFPB or Bureau) issued a Statement of Policy (Statement) on March 8 making it clear that going forward it will exercise its full authority to penalize covered persons found to have engaged in abusive acts or practices, 12 U.S.C. §5536(a)(1)(B), in violation of its core consumer protection authority. In doing so, the Bureau’s acting director rescinded a January 20, 2020, Policy Statement (2020 Statement) issued by a director appointed by former President Donald Trump, in which the Bureau advised, among other things which we have previously discussed, that it would generally not seek civil penalties for “abusive conduct” unless there had been a lack of a good faith effort to comply with the law.

We previously reported on recent mortgage rulemakings that were finalized by the Consumer Financial Protection Bureau (CFPB or Bureau) late last year. Of the two final rules from the Bureau, one drastically simplifies the definition of a “qualified mortgage” (QM) (the General QM Final Rule), and the other provides an alternate pathway to QM safe harbor status for certain seasoned mortgage loans (the Seasoned QM Final Rule). Both of these final rules—with potentially major impacts on the housing market—were published in the Federal Register on December 29, 2020, with effective dates of March 1, 2021 (although the General QM Final Rule contains a mandatory compliance date of July 1, 2021).

We previously reported on recent mortgage rulemakings that were finalized by the Consumer Financial Protection Bureau (CFPB or Bureau) late last year. Of the two final rules from the Bureau, one drastically simplifies the definition of a “qualified mortgage” (QM) (the General QM Final Rule), and the other provides an alternate pathway to QM safe harbor status for certain seasoned mortgage loans (the Seasoned QM Final Rule).

As part of President Joe Biden’s efforts to address the continuing impact of the COVID-19 pandemic on American families, on February 16, the US Department of Housing and Urban Development, US Department of Veterans Affairs, and US Department of Agriculture (together, the agencies) announced a coordinated extension and expansion of forbearance and foreclosure relief programs. This announcement extends and expands the agencies’ forbearance and foreclosure relief programs through June 30, 2021. The programs were due to expire in March.

Consumer Financial Protection Bureau (CFPB) Acting Director David Uejio has put a special focus on the manner in which responses are made to the CFPB’s consumer complaint system. Signaling the importance of this issue by undertaking it even before President Joe Biden’s nominee for director, Rohit Chopra, is confirmed to the position, Uejio has called out in a publicly released message to CFPB staff the possibility that some responses to complainants are incomplete—and vary by the complainant’s apparent demographic community.

The California Department of Financial Protection and Innovation (DFPI) announced in its January 2021 monthly bulletin that it will begin exercising its enhanced powers under the California Consumer Financial Protection Law (CCFPL) that came into effect January 1.

The Consumer Financial Protection Bureau (Bureau or CFPB) on January 13 issued a Statement Regarding the Provision of Financial Products and Services to Consumers with Limited English Proficiency (Statement), which is intended to provide compliance principles and guidelines to inform and assist financial institutions in their decisionmaking related to serving limited English proficiency (LEP) consumers in non-English languages.