WASHINGTON, D.C. — The Consumer Financial Protection Bureau released last Friday its Fall 2015 Rulemaking Agenda. In it, the CFPB outlined its list of current initiatives that would help it regulate consumer finance markets more effectively — many of which target the auto finance arena.
Among the areas listed in the bureau’s Fall 2015 Rulemaking Agenda were arbitration, debt collection, the regulation of larger participant nonbanks, and credit reporting.
In October, the bureau announced that is considering rules that would ban arbitration clauses in consumer financial service contracts. Describing such clauses as a “free pass” to block consumers from suing in groups to obtain relief, the bureau said the proposals under consideration would give consumers “their day in court and deter companies from wrongdoings.”
In March, the bureau released results of a three-year study on pre-dispute arbitration clauses. They showed, among other findings, that more than 75% of consumers surveyed did not know whether they were subject to an arbitration clause in their agreements with their financial services providers. In the proposed rule the CFPB is considering, arbitration filings and awards between consumers and financial institutions would be submitted to the bureau. This would allow the bureau to monitor the fairness of the arbitration proceedings between the two parties.
The CFPB is also in the process of developing a Notice of Proposed Rulemaking to address concerns regarding payday, auto title and similar lending products. The details of the rulemaking proposal won’t be released until the first quarter of 2016, but according to its rulemaking agenda, the bureau hopes to address its concern that lenders are offering products without assessing whether a consumer can actually repay their loan.
The CFPB stated that by not properly addressing a consumer’s ability to repay, consumers that can’t repay are forced to “choose between reborrowing, defaulting, or falling behind on other obligations.”
In addressing debt collection, the bureau said it plans to build on a previous Advance Notice of Proposed Rulemaking to analyze results of a nationwide survey on consumers’ experiences with debt collectors. “We’re also engaged in consumers testing initiatives to determine what information would be useful for consumers to have about debt collection and their debts, and how that information should be provided to them,” the bureau noted
As part of its fall 2015 initiatives, the CFPB also expects to develop rules that would help it define larger participants in markets for consumer installment loans and vehicle title loans. The CFPB is also considering whether to implement rules requiring the registration of lenders operating in consumer credit markets.
“We also expect to consider whether rules to require registration of lenders in these markets or other non-depository lenders would facilitate the bureau’s supervision of such entities,” the CFPB stated.