CFPB withdraws recently proposed rules

The CFPB withdrew another set of regulatory actions, this time proposals that amended Regulation AA and Regulation V, as well as an interpretive rule with changes to the Electronic Fund Transfer Act (EFTA) and Regulation E. All three proposals raised concerns for credit unions when issued. 

America’s Credit Unions outlined issues with the proposal expanding payment mechanisms regulated under Regulation E and the EFTA in March, noting a serious concern with the bureau’s decision to advance substantive changes to the regulation through an interpretive rule rather than the notice-and-comment process as required by the Administrative Procedure Act. The organization supports efforts to ensure a fair playing field exists in the market for payments—regardless of if they are conducted in dollars or virtual currencies—but opposes any expansion of credit union liability for unauthorized transactions. 

The proposal amending Regulation AA to prohibit specific terms and conditions in agreements for consumer financial products or services also raised concerns. America’s Credit Unions noted the terms which the rule would prohibit are already avoided by credit unions and that the rule would bring “minimal consumer benefit, but significant burdens.” 

In an April letter, America’s Credit Unions called for the withdrawal of the Regulation V proposal, which would have changed specific definitions of consumer reports and altered provisions of the Fair Credit Reporting Act (FCRA). America’s Credit Unions noted it would create significant compliance burdens, disrupt essential fraud prevention efforts, and disproportionately impact smaller credit unions with limited resources. 

The CFPB also withdrew several pieces of guidance, interpretive rules, policy statements, and advisory opinions last week. America’s Credit Unions continues to monitor actions from the bureau.