CO M P LI A N C E
NEW CHALLENGES AHEAD IN 2021 By FEL ECIA B O W ER S , H OM EOWN ERS F IN A N CIA L G ROU P
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y original thought was to recap 2020 before launching into speculation of what 2021 will hold for compliance professionals. I am confident that the events of 2020 will be forever etched into our memory banks and no one wants or needs a recap. Some things remained steady through 2020, including challenges relative to the constitutionality of the CFPB, payday rule, and privacy laws on federal and state levels, and we saw new definitions of what is considered non-public information. In the last two years, we saw an uptick in enforcement actions and the expansion of enforcement actions for redlining extending to a nonbank mortgage lender affiliate of real estate brokerage firms. I like the idea that CFPB issues are being resolved via supervisory actions, which focus on changing the behavior with oversight and supervision versus enforcement
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actions and fines. Compliance professionals should ensure that a review of any supervisory action is included in your periodic quiet reading time. If the issue does not fit within your organization right now, it may later. Who knows if the situation may impact your organization in the future? Or, is there a way someone within your organization could be guilty of committing the same protocol violation now thinking they will not get caught?
STATES’ RIGHTS
While the CFPB undergoes changes and possibly a refocus of their energy, we can expect the individual states to maintain or even ramp up their exam processes. NY, MA, NJ, PA, and CA have launched a mini version of the CFPB designed to pick up the slack in areas they perceive the CFPB is not being proactive. The states will establish their own definition of what
is or is not proactive enough. As I write this, I have six individual state exams in process. Each one is obviously different as to its depth and focus. Did anyone realize that Employee Earned Wage Access (EWA) programs were under scrutiny by the CFPB? I know I missed this one. EWA programs allow employees to access wages they have already worked for and accrued but have not been paid. The CFPB issued an Advisory Opinion on this subject on November 30,2020. Timing was probably not fortuitous given the global impact of COVID on companies. The opinion will impact your program depending on how your program works; for example, if the employee handles repayment via monthly payments, you may have to provide Regulation Z type disclosures. It is an interesting reading assignment. LIBOR sunsets by December 31, 2021 and by now, if you are still
