Continuing its efforts to eliminate instances of regulatory burden, the Consumer Financial Protection Bureau (CFPB) last month rescinded 67 pieces of regulatory guidance promulgated by the agency since 2011, including one on repossessions.
The rescinded guidance documents fell into four main categories: Interpretive Rules, Bulletins, Advisory Opinions, and policy statements such as Circulars. These documents impact most federal consumer financial protection laws, including the Fair Debt Collection Practices Act, the Fair Credit Reporting Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Electronic Fund Transfer Act, and the Military Lending Act.
Most notable for independent automotive dealers is the withdrawal of a 2022 Bulletin regarding the potential for violations of sections 1031 and 1036 of the Dodd-Frank Act’s prohibition on engaging in unfair, deceptive, or abusive acts or practices when repossessing vehicles. The bulletin highlights wrongful repossession practices, including misapplication of payments and the charging of fees after the repossession.
In announcing the rescissions, CFPB acting Director Russell Vought noted that in many instances, the guidance adopted legal interpretations inconsistent with the statutory text and imposed compliance burdens on regulated entities outside of the boundaries of formal notice-and-comment rulemaking.
NIADA reminds dealers that, in light of the recent announcements from the CFPB, they should remain vigilant in their compliance efforts. State regulatory and law enforcement officials across the country are widely expected to exercise their own supervisory and enforcement authorities in the absence of robust federal oversight. To assist in that effort and an apparent prediction of last month’s action, in the waning days of former Director Rohit Chopra’s term, the CFPB issued a collection of guidance documents to serve as a roadmap for state attorneys general and other state and local law enforcement agencies to rely on when enforcing consumer financial protection laws.
