FEDERAL GOVERNMENT RELATIONS
CFPB Pushes Back Section 1071 Compliance Deadlines
The Consumer Financial Protection Bureau last Friday announced that it had pushed back by several months the compliance deadlines for its Section 1071 small-business data collection rule in response to litigation.
The compliance deadline for Tier 1 institutions is now July 18, 2025, with the first filing deadline on June 1, 2026. The compliance deadline for Tier 2 institutions is Jan. 16, 2026, with the first filing deadline June 1, 2027. The compliance deadline for Tier 3 institutions is Oct. 18, 2026, with the first filing deadline also June 1, 2027.
A federal court in Texas stayed implementation of the rule pending the outcome of a separate Supreme Court case involving the constitutionality of the CFPB’s funding, with the high court last week upholding the bureau’s funding structure. The Texas court ordered the CFPB to extend the rule’s compliance deadlines to compensate for the period stayed, the bureau said.
FDIC's Gruenberg Announces Intention to Resign
Federal Deposit Insurance Corp. Chairman Martin Gruenberg announced Monday that he will resign once a successor has been named to fill his position. The announcement comes after a third-party investigation found widespread sexual harassment and discrimination at the FDIC. While the report found no evidence directly linking Gruenberg to the alleged harassment, investigators spoke with FDIC employees who said the chairman lashed out angrily at staff, and he has faced calls from lawmakers in both parties to step down.
“It has been my honor to serve at the FDIC as chairman, vice chairman and director since August of 2005,” Gruenberg said in a statement. “Throughout that time, I have faithfully carried out the critically important mission of the FDIC to maintain public confidence and stability in the banking system. In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed. Until that time, I will continue to fulfill my responsibilities as chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”
In a statement, House Financial Services Committee Chairman Patrick McHenry, R-N.C., called Gruenberg’s announcement “too little, too late,” saying the FDIC chairman should resign immediately. Senate Banking Committee Chairman Sherrod Brown, D-Ohio, in a statement earlier in the day, urged President Biden to nominate a new FDIC chair “who can lead the FDIC at this challenging time and for the Senate to act on that nomination without delay.
CFPB to Define 'Buy Now, Pay Later' Providers as Credit Card Providers
The Consumer Financial Protection Bureau Wednesday issued an interpretive rule to define lenders who provide "buy now, pay later" products as credit card providers under the Truth in Lending Act. As a result, BNPL lenders will be required to provide consumers with options currently available to credit card holders, such as the ability to dispute merchant charges through the creditor.
In a statement, CFPB said the BNPL industry has expanded rapidly in recent years. (A Federal Reserve survey released Tuesday found that 14% of U.S. adults last year said they had used a BNPL product in the past 12 months.) Like conventional credit cards, BNPL combines payment processing and credit services, while charging transaction fees to merchants, the bureau said. “Because BNPL lenders will typically meet criteria under existing law and regulation as traditional credit card providers, they need to extend many of the same rights and protections as classic credit card providers.”
As a result of the interpretive rule, BNPL lenders must investigate disputes that consumers initiate, refund returned products or canceled services, and provide billing statements, according to the CFPB. The bureau added that it is accepting public comments on the rule through Aug. 1.
Banking Agencies Move Forward with Revised Call Report Requirements
The Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency Wednesday issued a joint notice stating that they are moving forward with a proposal to swap out references to troubled debt restructurings with “modifications to borrowers experiencing financial difficulty,” or FDMs, in call report and FFIEC 002 forms. However, the agencies also announced they will take more time to consider controversial revisions related to the length of time that FDMs must be reported in the call report, as well as the reporting of past-due loans.
Last year, the three agencies proposed revisions to call reports to address previous changes in accounting that eliminated troubled debt restructurings. In the notice, the agencies said they plan to adopt that and other revisions to call report and FFIEC 002 forms. But in a change from the original proposal, the agencies said they will continue to consider revisions regarding the reporting of FDMs, past-due loans and long-term debt requirements. They also reopened the proposal to public comment.
FHA Announces Cybersecurity Reporting Requirement for Approved Lenders
Lowering the cap on debit card interchange fees will hinder a bank's ability to offer low- and no-cost bank accounts to low- and moderate-income Americans, Rep. David Scott, D-Ga., said Wednesday during the House Financial Service Committee's oversight hearing of banking regulators. Scott questioned Federal Reserve Vice Chairman for Supervision Michael Barr on the Fed's proposal to revise Regulation II to lower the cap. Barr didn't commit to any course of action, saying the agency is still reviewing public comments.
Scott also asked Barr whether the Fed shares banks' concerns about the effects of lowering the cap on their ability to offer low- and no-cost bank accounts. Again, Barr said the agency is still reviewing comments. "I don't have an answer to your question yet, but those are the kinds of comments we'll take quite seriously," Barr said.