Looking back on 2022 through the lens of compliance

In January, we closed our column on compliance predictions for 2022 in hopes of a more predictable year. are we still laughing?

I divided my predictions into three categories. State regulation and regulatory agency, Chopra era. CFPB, and the Act of Parliament. Let’s look back at the movements in these three areas.

regulation at the state level

State-level regulation this year focused on data privacy. No surprises there. Not only did his three states we knew earlier this year (California, Colorado, and Virginia) enact comprehensive consumer cybersecurity and data protection laws that take effect in early 2023, In addition he was joined by two states, Connecticut and Utah.

Connecticut’s Personal Data Privacy and Online Surveillance Act, enacted in May, will take effect on July 1, 2023, and Utah’s Consumer Privacy Act, enacted in March, will take effect on December 31, 2023. takes effect. Lenders who haven’t started cybersecurity training or updating their compliance policies and procedures should strongly consider making it a New Year’s resolution.

As of January 1, 2023, on the topic of California as a state regulatory pioneer, the Guaranteed Asset Protection (GAP) exemption sold in connection with an intrastate Conditional Sale Contract (CSC). Regulating laws are enforced. The bill includes requirements for both the initiating and service/terminating sides of the bilateral GAP exemption, but does not apply to GAP insurance. This could represent the next frontier for aggressive state legislation. Processing refunds and canceling optional protected products.

Chopra’s CFPB

In January, I urged landlords to expect increased investigations and enforcement this year. Sure enough, the last 12 months have seen an increase in supervisory enforcement and regulation. The Bureau has been very active in publishing blog posts, articles, and advisory opinions, not through regulation, but to reflect its oversight position.

The CFPB has reiterated its position on proper remand practices and policies, building on relevant guidance from 2018, imposing a greater burden on financial firms to ensure proper vendor controls and robust internal systems. doing. In addition, it is important to fully document the consumer contract for payment plans and adhere to what was originally agreed upon.

The Bureau also focuses on fee-based programs in debt collection. While ostensibly this is not directly relevant to creditors, lenders should be aware that the CFPB makes extensive use of his UDAAP authority when considering using payment fee programs.

Finally, on the topic of the CFPB, who could have predicted that the very existence of the Secretariat would be called into question this year? In Community Financial Services Association v. CFPB in October, the New Orleans Court of Appeals for the Fifth Circuit ruled that the CFPB’s self-financing mechanism was unconstitutional. The CFPB has asked the Supreme Court for expedited review, so we can expect a resolution next year.

Also at the forefront of broader federal regulation, the Federal Trade Commission (FTC) confirms its particular interest in auto dealership practices related to the sale and financing of both vehicle and voluntary insurance products. Did.

parliamentary legislation

While we expected activity in this area, Capitol Hill has been relatively quiet this year on data protection and privacy, with the aforementioned states picking up on many of the legislative and regulatory laxities. Given the change in Republican control of the U.S. House of Representatives, it is unlikely that there will be any major moves ahead.

The lingering impact of COVID-19 on the nation’s health and economy includes supply chain and inventory problems that have caused runaway inflation, and a dramatic rate hike by the Federal Reserve in response, expected to rise by 2022. It’s been a strange year indeed. These factors may limit access to credit for many consumers, thus reducing lending volumes. Hopefully, 2023 will bring some stability to the auto finance market, if not the predictability I’d hoped for this year.

Mark Edelman and chairs the National Consumer Financial Services Compliance Practice Group. mcgrinchee.

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