CFPB Withdraws Numerous Prior Guidance Documents

The CFPB formally withdrew 67 prior guidance documents, including various advisory opinions, policy statements, interpretative rules, and circulars issued under prior administrations.

The CFPB’s notice of withdrawal stated that the agency had previously issued guidance and adopted interpretations that were inconsistent with statutory text or which imposed compliance burdens without going through proper notice-and-comment rulemaking.  The agency further noted that even if some guidance might advance a permissible statutory interpretation, the CFPB’s policy going forward would be to avoid issuing guidance except where necessary and where compliance burdens would be reduced rather than increased.  The agency is in the process of reviewing prior guidance to confirm: 1) whether the guidance was statutorily prescribed; 2) whether the interpretations in the guidance were consistent with the relevant statutes or regulations; and 3) whether the guidance imposed or decreased compliance burdens.  While this review is continuing, the CFPB determined that it would withdraw a number of prior items, including its:

• 2023 Statement of Policy defining the “abusive” prong of its authority to go after unfair, deceptive, or abusive acts or practices (UDAAP) under the Consumer Financial Protection Act (CFPA);

• 2024 guidance regarding TILA & Regulation Z consumer protections applicable to seller financed property sales where the seller retains the deed until the buyer completes the installment payments;

• 2024 Circular on how the inclusion of unlawful or unenforceable provisions in contracts could be a UDAAP violation;

• 2022 guidance regarding how digital marketing providers which provide targeted advertising (e.g., based on individual consumer data and algorithms) may be deemed consumer financial “service providers” under the CFPA:

• 2021 guidance on how discrimination based on sexual orientation and gender identity violates ECOA & Regulation B;

• 2014 Bulletin regarding the applicability of TILA and the Ability-to-Repay rule to people who inherit a property subject to a mortgage and who agree to be added to the mortgage;

• 2022 guidance on evaluating permissible purposes for furnishing, using, and obtaining consumer reports;

• 2023 Circular regarding how negative option marketing (i.e., where a consumer’s silence, failure to act, or failure to cancel is treated as acceptance of an agreement) may be a UDAAP violation;

• 2022 Circular on how insufficient data protection and cybersecurity practice may be a UDAAP violation;

• 2022 Bulletin regarding how contract provisions which prohibit negative consumer reviews may violate UDAAP;

• 2016 Bulletin on how certain sales incentives can result in UDAAP violations;

• Multiple guidance items regarding furnishers’ obligations under FCRA to investigate disputed information in a consumer report;

• Multiple guidance items on requirements for adverse action notices under ECOA in connection with credit denials based on artificial intelligence or complex credit models;

• 2012 Bulletin affirming that disparate impact can serve as the basis for an ECOA violation; and

• 2012 Bulletin discussing how the Loan Originator Compensation rule applies to profit sharing, 401(k) retirement accounts, and employee stock ownership plans.

The CFPB noted that its review of prior guidance was ongoing and that some of the withdrawn items might later be reissued, but that the agency did not intend to prioritize enforcement actions for non-conformance with guidance while it was withdrawn.