The crystal ball: compliance forecast for 2022
Welcome to my latest attempt to predict what the next year will hold for the auto finance industry. As I mentioned in last month’s column, there are a number of regulatory themes for 2021 that we can expect to carry over into the new year ahead. A overarching theme that emerges is data privacy, and I predict that we will see continued evolution in this area from a number of sources.
State regulations and regulatory bodies
As California created the Financial Protection and Innovation Department as its own “mini-CFPB,” other states have stopped short of forming new regulatory bodies, only going so far as to rename or otherwise make existing agencies more accountable. Data privacy remains a topic of interest at the state level, as evidenced by further changes to comprehensive California laws and new Colorado and Virginia laws that come into effect in early 2023. With the potential for something at the federal level, lenders would be well served. dedicate resources this year to upgrading cybersecurity compliance policies and procedures and appropriate staff training.
The CFPB of the Chopra era
With the director Rohit chopra being confirmed in his post at the end of September, much remains to be seen on the priorities of the CFPB under the new administration. One move they’ve already pointed out, however, is of interest to big industry participants and their use of big data. While the impact on auto lenders in this regard remains to be seen, we should expect an increase in investigation and enforcement in the coming months.
Legislation of Congress
Between state-level activity, recent high-profile hacks, breaches and abuse of consumer information, and increased attention to the CFPB, will Congress be motivated to pass legislation? federal government on data privacy in 2022? While HR 1816, the Information Transparency and Personal Data Control Act, was introduced in March, not much has happened since then.
It is interesting to note that Rep. Maxine Waters, chair of the House Financial Services Committee, signaled in late 2021 that she wanted Congress “to go into more detail” especially for third-party data aggregators and payment processors. Like every year, we will keep our eyes open for possible legislation on the Hill.
Aside from consumer privacy, we anticipate continued impacts of COVID-19 in 2022. Primarily, auto lenders will want to ensure that they follow through on promises made during the peak of the pandemic with regards to maintenance. and collections.
When it comes to collections, we all know that the new CFPB rules under the Fair Debt Collection Practices Act, Reg F, came into effect on November 30, 2021. Although the CFPB has specifically noted that Reg F is applies to third-party debt collectors, one wonders whether the more specific prohibitions in the new rules could serve as a benchmark for UDAAP’s claims against creditors.
Hopefully 2022 will be more predictable than the previous two years. In all cases, Mcglinchey lawyers will keep you informed of regulatory updates and compliance issues in the months to come. Watch this space for more updates and Happy New Year everyone!
Marc Edelman is the Chair of the National Consumer Financial Services Compliance Practice Group at Mcglinchey.