On December 16, 2011, the Consumer Financial Protection Bureau (CFPB) issued three interim final rules modifying three separate consumer protection laws. This is the first of likely many waves of regulation in the exercise of the agency’s rulemaking authority granted at its inception on July 21, 2011, under the Dodd-Frank Act. The interim final rules published today transfer the rulemaking authority originally vested in the Federal Trade Commission to the CFPB and duplicate existing regulations, making only technical, formatting, and stylistic changes. None of the proposed regulations impose any new substantive obligations on regulated entities. The rules are briefly summarized below.
Proposed “Regulation F”: Fair Debt Collection Practices Act (FDCPA) Exemption Process (76 FR 78121)
The FDCPA was enacted to eliminate abusive debt collection practices by debt collectors and promote consistent state action to protect consumers. To prevent duplicative enforcement efforts, this rule describes the procedure by which states may apply to the CFPB for an exemption under the FDCPA if certain debt collection practices are subject to “substantially similar” state law.
Proposed “Regulation I”: Federal Deposit Insurance Act (FDIA) Disclosure Requirements (76 FR 78126)
The FDIA establishes the Federal Deposit Insurance Corporation, which insures the deposits of certain banks and savings associations. Not all depository institutions are required to maintain Federal deposit insurance, and this rule addresses the disclosure requirements for those exempt depository institutions.
Proposed “Regulations N and O”: Mortgage Acts and Practices – Advertising Rule; Mortgage Assistance Relief Services Rule (76 FR 78130)
This rule relates to unfair or deceptive acts or practices regarding mortgage loans, loan modifications, and foreclosure rescue services. Regulation N prohibits any material misrepresentation – express or implied – in commercial communications as to the fees and costs associated with mortgage credit products. Regulation O mandates various disclosures by mortgage assistance relief services in advertising material and in written agreements executed by the consumer.
All three interim final rules have an effective date of December 30, 2011. Affected businesses are strongly encouraged to submit their comments before the deadline on February 14, 2012.