In a new publication Dodd-Frank and Community Banks: Your Guide to 12 Critical Issues, the American Bankers Association covers key areas such as capital, housing (QM and QRM), interchange, preemption and more.
In the section on the Consumer Financial Protection Bureau, ABA highlights six areas to watch.
First are the rules promulgated from the 17 consumer laws that the CFPB now oversees. “There is no community bank exemption from the Bureau’s rule-writing power,” ABA reminds bankers.
Second, banks are subject to overlapping rules – those from the CFPB, as well as the prudential regulators’ rules.
Third, the state attorneys general can now enforce consumer protection laws against community banks, and only the CFPB – not prudential regulators – can intervene in an enforcement action initiated by a state AG. (The CFPB and the Presidential Initiative Working Group of the National Association of Attorneys General signed a Joint Statement of Principles in April 2011.)
Next is a concern about costly record-keeping and reporting requirements. In the future, all banks must collect and report additional HMDA data (see the CFPB’s HMDA Examination Procedures). In the future – no date for the rule-making has been set, according to the Financial Services Roundtable – banks must collect and report similar data for small business loans. Banks must also provide customers with broader access to account, transaction and fee information. The Bureau can request “other information” from any bank at any time.
In addition, bankers have expressed concern about being limited to so-called plain vanilla products – and it may not be far-fetched. ABA says that “banks will find it much more difficult to tailor loan and deposit products to their customers.
Finally, the Bureau has the power to label and take action against practices deemed unfair, deceptive and abusive. The new, broader UDAAP standard may create “an environment conducive to increased litigation,” according to the ABA. (Read Part 1, Part 2 and Part 3 of CFPB Journal’s Q&A with UDAAP expert Jo Ann Barefoot.)