Forms Will Change With CFPB in Charge
New language will be required by Jan. 1, 2013.
Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rule-making authority for a number of consumer financial protection laws from seven federal agencies to the Consumer Financial Protection Bureau (CFPB) as of July 21, 2011.
The CFPB republished these “inherited” regulations as interim final rules. The rules don’t impose additional reporting, disclosure, or other requirements beyond those previously in existence (at least at this point). But certain model forms in the regulations must be updated to reflect new references to the CFPB. Any form changes mentioned below will be required on Jan. 1, 2013, unless otherwise noted.
Equal Credit Opportunity Act (ECOA).
Consistent with the Federal Reserve Board’s Regulation B, the CFPB’s regulation requires creditors to provide a statement of an applicant’s rights under ECOA when adverse action is taken, and this statement must include the name and address of the appropriate federal agency that administers compliance with the act for that institution. Most credit unions won’t have to make any changes to their current adverse action notices. But credit unions with total assets of more than $10 billion will have to amend their forms to list the CFPB as the agency that administers ECOA compliance for the institution. (Remember the CFPB’s supervision program for very large banks, thrifts, and credit unions—those with assets of more than $10 billion—began operations on July 21, 2011.)
Transfer Act. The CFPB’s revised model consent form for ATM and one-time debit card overdraft services (Form A-9) is identical to the Federal Reserve Board’s form in substance. So, credit unions can continue to use their current overdraft “opt-in” forms.
The CFPB’s only revision to the form was to change the spelling of “website” (rather than “Web site”) to correspond with the regulation. According to the supplemental information to the CFPB’s Reg E, this change doesn’t require any revision to standard forms credit unions currently use because “website” appears in the model form as a placeholder within brackets. This means the institution is to replace the placeholder with its own website address. The term doesn’t appear in overdraft service consent forms that members receive.
Fair Credit Reporting Act (FCRA).
The CFPB’s regulation “substantially duplicates” most of the interagency FCRA regulations issued by NCUA, the Federal Trade Commission (FTC), and the federal banking agencies, as well as the stand-alone FTC regulations. But the Dodd-Frank Act didn’t transfer all rule-making authority under the FCRA. The law didn’t give the CFPB the authority to promulgate rules on:
- The disposal of consumer information;
- Identity theft red flags; and
- Rules on the duties of card issuers regarding changes of address.
So, credit unions should continue to refer to NCUA regulations (for federal credit unions) and FTC regulations (for state-chartered credit unions) for these provisions rather than the CFPB’s new Reg V.
The FCRA model forms and disclosures were updated to include references to the CFPB’s website and physical address. The revised forms are the:
- Risk-based pricing model forms (Appendix H);
- Summary of consumer identity theft rights (Appendix I);
- General summary of consumer rights (Appendix K);
- Notice of furnisher responsibilities (Appendix M);
- Notices of user responsibilities (Appendix N); and
- Identity theft affidavit (Appendix O).
The only forms that credit unions provide are the risk-based pricing model forms (if applicable). These forms include the:
- Model risk-based pricing notices for use with and without credit score information;
- Model forms for use in connection with an account review; and
- Credit score “exception” notices.
The other model forms listed in the previous paragraph are provided to consumers by consumer reporting agencies, with the exception of the identity theft affidavit which is available for download on the FTC website.
Next: Real Estate Settlement Procedures Act (RESPA).
Real Estate Settlement Procedures Act (RESPA).
The Dodd-Frank Act directed the CFPB to integrate certain disclosures required by the Truth in Lending Act and RESPA to create a single, easier-to-use mortgage disclosure for consumers. The CFPB is currently working on these changes and expects the content and format of HUD’s existing HUD-1, HUD-1A, and Good Faith Estimate (GFE) forms to be significantly revised or replaced by this rule-making.
The current HUD-1/1A and GFE forms list HUD’s Office of Management and Budget (OMB) control number, 2502-0265, to satisfy certain information collection requirements of the Paperwork Reduction Act. Modifying existing forms solely to replace HUD’s OMB control number with the CFPB’s OMB control number would impose a substantial burden on institutions while providing limited or no net benefit to consumers.
So the CFPB will allow the continued use of HUD’s OMB control number on the HUD-1/1A and GFE forms until further notice. The CFPB also added language to the regulation’s Appendix C (Instructions for Completing the GFE Form) to clarify that institutions may replace HUD’s OMB control number with the CFPB’s OMB control number on the form at their option; and they won’t be required to display the expiration date that’s associated with the OMB control number displayed on the HUD-1/1A forms.
Truth in Lending
Certain Reg Z model forms were revised to change references from the Federal Reserve Board to the CFPB and their respective websites. The revised forms are the credit card applications and solicitations model forms G-10(A) through G-10(C); and the credit card account-opening model forms G-17(A) through G-17(C). Credit unions may make changes to these forms now or wait until next January. The agency has preserved the safe harbor for card issuers using the old version of these models until they have modified their systems as necessary, provided they do so by Jan. 1, 2013.
Note that the CFPB didn’t make any changes that would affect model forms under Regs DD (Truth in Savings), M (Consumer Leasing), or P (Privacy). The agency made certain “nomenclature and other nonsubstantive changes” consistently throughout the regulations, and eliminated anything that was outdated or unnecessary for purposes of implementing the various consumer laws.
VALERIE Y. MOSS is CUNA’s director of compliance information. Contact CUNA’s
compliance department at firstname.lastname@example.org.
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