Rescission of Statement of Policy on Bureau Supervisory and Enforcement Response to COVID-19 Pandemic

Citation86 FR 17699
CourtConsumer Financial Protection Bureau
Publication Date06 Apr 2021
Record Number2021-06964
Federal Register, Volume 86 Issue 64 (Tuesday, April 6, 2021)
[Federal Register Volume 86, Number 64 (Tuesday, April 6, 2021)]
                [Rules and Regulations]
                [Pages 17699-17700]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-06964]
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                BUREAU OF CONSUMER FINANCIAL PROTECTION
                12 CFR Chapter X
                Rescission of Statement of Policy on Bureau Supervisory and
                Enforcement Response to COVID-19 Pandemic
                AGENCY: Bureau of Consumer Financial Protection.
                ACTION: Rescission of statement of policy.
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                SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
                rescinding the Statement on Bureau Supervisory and Enforcement Response
                to COVID-19 Pandemic.
                DATES: This rescission is applicable on April 1, 2021.
                FOR FURTHER INFORMATION CONTACT: Mehul Madia, Division of Supervision,
                Enforcement, and Fair Lending, at (202) 435-7104. If you require this
                document in an alternative electronic format, please contact
                [email protected].
                SUPPLEMENTARY INFORMATION: On March 26, 2020, the Bureau issued a
                statement entitled, ``Statement on Bureau Supervisory and Enforcement
                Response to COVID-19 Pandemic'' (Statement), regarding the Bureau's
                exercise of its supervisory and enforcement discretion during the
                pandemic.\1\ Specifically, the Statement provided that the Bureau would
                take into account staffing and related resource challenges confronting
                financial institutions and their counsel as they relate to supervisory
                activities and enforcement actions. The Statement also noted that when
                conducting examinations and other supervisory activities and in
                determining whether to take enforcement action, the Bureau will
                consider the circumstances that entities may face as a result of the
                COVID-19 pandemic and will be sensitive to good-faith efforts
                demonstrably designed to assist consumers.
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                 \1\ https://files.consumerfinance.gov/f/documents/cfpb_supervisory-enforcement-statement_covid-19_2020-03.pdf.
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                 The Bureau hereby rescinds, as of April 1, 2021, the Statement and
                announces its intent to exercise its supervisory and enforcement
                authority consistent with the Dodd-Frank Act and with the full
                authority afforded by Congress consistent with the statutory purpose
                and objectives of the Bureau.
                 The Statement expressed the Bureau's recognition of the impact of
                the COVID-19 pandemic on the operations of many financial institutions,
                including staffing and related resource challenges confronting
                financial institutions and their counsel. The Bureau has concluded that
                since release of this statement such circumstances have changed. Since
                March 2020 and over the course of the COVID-19 pandemic, financial
                institutions and other entities that provide financial services and
                products to consumers have adjusted operations by, for example,
                shifting to a remote mode of operation. As States and other
                jurisdictions have rescinded and modified stay-at-home orders over the
                course of the pandemic, many financial services entities have resumed
                some level of in-person operations and, in many instances combined with
                more robust remote capabilities, have demonstrated improved business
                continuity.
                 With regard to the temporary flexibility announced in the
                Statement, the Bureau believes that companies should have had
                sufficient time to adapt to the pandemic and should now be able
                adequately to comply with the law and respond to enforcement actions or
                supervisory activities without the flexibility afforded under the
                statement. In addition, because the Statement did not create binding
                legal obligations on the Bureau or create or confer any substantive
                rights on external parties, it did not create any reasonable reliance
                interests for industry participants.
                [[Page 17700]]
                Indeed, the Bureau never intended the Statement to be permanent, and
                accordingly expressly framed the Statement as temporary relief.
                 The Bureau continues to encourage institutions to meet the
                financial services needs of their customers affected by the COVID-19
                pandemic.
                 The COVID-19 pandemic is a national emergency that threatens the
                financial well-being of millions of Americans, with particularly dire
                effects to communities of color. As the pandemic continues to unfold,
                consumers are facing economic hardship and compliance with Federal
                consumer financial law therefore is of paramount importance. The
                Bureau's statutory purposes include ``ensuring . . . that markets for
                consumer financial products and services are fair, transparent, and
                competitive.'' 12 U.S.C. 5511(a). Declining to cite conduct consistent
                with the full scope of the Bureau's supervision authority based on the
                articulated principles in the Statement may skew the consumer financial
                marketplace, to the detriment of market participants who comply with
                the law. To fulfill its statutory mandate, the Bureau has made it a
                priority to direct its supervisory, enforcement, and other tools to the
                prevention of harm to consumers from unlawful acts, policies, and
                practices. It is therefore of critical importance that institutions
                adhere to consumer protection requirements, including fair lending
                laws, in their interactions with consumers, and that the Bureau use its
                supervisory and enforcement tools to the full extent and with the full
                flexibility afforded by Congress.
                 The Bureau is therefore rescinding the Statement, applicable as of
                April 1, 2021.\2\ Instead, in its discretion, the Bureau intends to
                exercise its supervisory and enforcement authority using a risk-based
                approach and considering responsible business conduct, consistent with
                the Dodd-Frank Act and with the full authority afforded by Congress
                consistent with the statutory purpose and objectives of the Bureau.\3\
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                 \2\ Last year, the Bureau, along with the Board of Governors of
                the Federal Reserve, the Federal Deposit Insurance Corporation, the
                National Credit Union Administration, the Office of the Comptroller
                of the Currency (the ``Agencies'') issued statements entitled
                ``Interagency Statement on Loan Modifications and Reporting for
                Financial Institutions Working with Customers Affected by the
                Coronavirus'' (April 7, 2020) (the ``April 7 Interagency
                Statement''), and ``Interagency Statement on Appraisals and
                Evaluations for Real Estate Related Financial Transactions Affected
                by the Coronavirus'' (April 14, 2020) (the ``April 14 Interagency
                Statement''). Both statements provided that the Agencies did not
                intend to take public enforcement actions against entities in
                certain instances. The April 7 Interagency Statement focused on loan
                modifications and stated that the agencies ``do not expect to take a
                consumer compliance public enforcement action against an
                institution, provided that the circumstances were related to the
                National Emergency and that the institution made good faith efforts
                to support borrowers and comply with the consumer protection
                requirements, as well as responded to any needed corrective
                action.'' Under the April 14 Interagency Statement, the agencies, as
                defined in that Statement, addressed flexibilities under certain
                appraisal standards. To the extent that the Bureau indicated
                flexibility, it now intends to exercise its supervisory and
                enforcement authority consistent with the Dodd-Frank Act and with
                the full authority afforded by Congress. As detailed in the
                Statement it is issuing today, the Bureau believes the circumstances
                described in the April 7 Interagency Statement and the April 14
                Interagency Statement have changed and that companies should have
                had sufficient time to adapt. As such, the Bureau does not intend to
                continue to provide any flexibilities afforded entities in these
                specific sections of both the April 7 Interagency Statement and the
                April 14 Interagency Statement.
                 \3\ See, e.g., CFPB Bulletin 2020-1, Responsible Business
                Conduct: Self-Assessing, Self-Reporting, Remediating, and
                Cooperating, available at https://files.consumerfinance.gov/f/documents/cfpb_bulletin-2020-01_responsible-business-conduct.pdf.
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                Regulatory Requirements
                 The Statement constituted a general statement of policy exempt from
                the notice and comment rulemaking requirements of the Administrative
                Procedure Act (APA). It was intended to provide information regarding
                the Bureau's general plans to exercise its supervisory and enforcement
                discretion and did not impose any legal requirements on external
                parties, nor did it create or confer any substantive rights on external
                parties that could be enforceable in any administrative or civil
                proceeding. This rescission likewise is a general statement of policy
                exempt from the notice and comment rulemaking requirements of the APA.
                It is intended to provide information regarding the Bureau's general
                plans to exercise its supervision and enforcement discretion and does
                not impose any legal requirements on external parties or create or
                confer any substantive rights on external parties that could be
                enforceable in any administrative or civil proceedings. No notice of
                proposed rulemaking was originally required in issuing the Statement
                and it is not required in issuing this rescission. The Regulatory
                Flexibility Act also does not require an initial or final regulatory
                flexibility analysis for this rescission. The Bureau has also
                determined that the rescission of the Statement does not impose any new
                or revise any existing recordkeeping, reporting, or disclosure
                requirements on covered entities or members of the public that would be
                collections of information requiring approval by the Office of
                Management and Budget under the Paperwork Reduction Act.
                 Dated: March 29, 2021.
                David Uejio,
                Acting Director, Bureau of Consumer Financial Protection.
                [FR Doc. 2021-06964 Filed 4-5-21; 8:45 am]
                BILLING CODE 4810-AM-P