CFPB Director Discusses HMDA, Privacy, Innovation, Pending Rules During HFSC Hearing

During her testimony before the House Financial Services Committee yesterday, CFPB Director Kathy Kraninger addressed a number of issues of concern to credit unions including the Home Mortgage Disclosure Act (HMDA), innovation and qualified mortgage (QM) patch. She will appear before the Senate Banking Committee this morning.

A brief overview of some of the issues Kraninger discussed yesterday follows:

Data collection

  • HMDA: Kraninger said the bureau "wants to balance the burden on smaller entities and promote fair lending." The bureau is currently considering ways to reduce the burden of HMDA compliance.
  • Small business data collection: Kraninger explained that it is a mandatory rulemaking under Dodd-Frank and the CFPB plans to hold a future symposium on the issue. The bureau issued a request for information on the issue in 2017.
  • Privacy: Kraninger told the committee that the bureau is looking to bolster its protection of data that it collects but noted that Dodd-Frank specifically excludes from the CFPB's rulemaking, examination, and enforcement authority certain requirements for financial institutions covered under the Gramm-Leach-Bliley Act.

CFPB rulemakings/guidance of note for credit unions

  • Innovation: Kraninger gave lawmakers more details about the bureau's recently finalized innovation policiesthat are intended to promote innovation and facilitate compliance at financial institutions. She said the bureau is looking at ways to use alternative data models to ensure more consumers have access to credit, and how artificial intelligence could be used to improve fair lending compliance.
  • QM patch: The bureau released an advance notice of proposed rulemakingto revise the General QM definition in light of the possible ability-to-repay (ATR)/QM patch expiration. Kraninger said the bureau is reviewing comments received to determine a transition period and address ATR requirement concerns.
  • Remittance rule: In response to concerns express by a committee member about consumers losing access to these remittance services as the bureau's exemption is set to expire, Kraninger said the bureau is considering comments received to address threshold concerns and intends to include an item on its fall rulemaking agenda.
  • UDAAP: Earlier this year, the bureau held a symposiumfocused on clarifying "abusive" under unfair, deceptive, or abusive acts and practices, or UDAAP. Kraninger indicated that the bureau is reviewing feedback to determine its next step in potential guidance on the issue.

CFPB constitutionality/authority

  • The CFPB last month announced it will no longer defend its single-director structure. Kraninger reiterated this stance saying that the bureau's statutory director-removal provision should be reviewed as it may be unconstitutional.