The Consumer Financial Protection Bureau released its new five-year strategic plan on Monday that continues Acting Director Mick Mulvaney’s tone of deregulation and mentions a new pilot for supervisory activities.
Few details were given in the report other than the bureau’s supervision, enforcement, and fair lending divisions will pilot “a project to conduct supervisory activities to supplement the traditional examination process.” The CFPB was unable to respond by press time for clarification on the program.
More broadly, the report officially states what Mulvaney’s previous memos have signaled, which is that the CFPB will not “push the envelope” when it comes to enforcement.
“We have committed to fulfill the bureau’s statutory responsibilities, but go no further,” Mulvaney wrote in the preface to the report. “This strategic plan provides the bureau a ready road map, a touchstone with a fixed meaning that should serve as a bulwark against the misuse of our unparalleled powers. Just as important, it provides clarity and certainty to market participants.”
During his short tenure as acting director, Mulvaney has instituted a number of changes culminating in this report to state the bureau’s long-term intentions. He has halted progress on the payday lending rule passed under the previous leadership, initiated a series of requests for information regarding nearly every facet of the CFPB’s operations, ended lawsuits the bureau has been investigating for years, and stripped the Office of Fair Lending and Equal Opportunity of its enforcement powers.
Several lawyers told Auto Finance News that the CFPB’s new tone is unlikely to change the examination process for lenders. In fact, lenders were sent notices of upcoming examinations earlier this month.
The exams are likely to focus less on unfair, deceptive, or abusive acts or practices (UDAAP), but rather draw from “specific laws” that require proof of significant and quantifiable consumer harm to prosecute, Michael Benoit, partner at Hudson Cook LLP, told AFN last week ahead of the bureau’s official announcement.
However, the new strategic plan does change how the bureau approaches enforcement that follows those examinations.
“They will not stop doing their job, they will do it with a different focus,” Benoit said. “They will focus on what has the harm been. They won’t ding you for technical violations, they will make you fix them, but they won’t seek multi-million-dollar settlements for technical violations.”Like This Post