Compliance amid a pandemic: Top 5 stories in 2020

Nothing throws compliance into focus quite like a worldwide pandemic. When the COVID-19 pandemic hit the U.S. in March, auto lenders faced difficult decisions and unique challenges in upholding compliance laws while helping struggling consumers.

Here are the top five compliance stories in 2020:

What is the future of the CFPB post-election?

President-elect Joe Biden’s administration is sure to bring sweeping changes to regulation across many industries and government departments, in particular the Consumer Financial Protection Bureau. While Biden has yet to make any formal announcements as to changes to the Bureau, experts agree that the president-elect will appoint a new director.

Under the Trump administration, public actions slowed down, and the Bureau notably issued less guidance. The U.S. Supreme Court decided that the president could remove the CFPB director, opening the door for a change in leadership under Biden’s presidency that could return the Bureau to Cordray-era operations.

Consumer protection advisory program

The CFPB in June launched a pilot advisory opinion program in which lenders may submit requests to clear up confusion on regulations. The Bureau reviews requests and, at its discretion, provides clear guidance. Clarity on issues can help lenders better comply before there are problems, but the program requires lenders to contact the Bureau.

Lenders prepare for repossession wave

Pandemic-induced stimulus packages and extra federal unemployment funds temporarily helped shield borrowers from the impact of COVID-19. Some consumers, however, are still struggling as relief programs end, prompting lenders to prepare for a projected wave of vehicle repossessions in the coming months.

Will California’s mini-CFPB strengthen enforcement?

California’s Department of Financial Protection and Innovation ups the state’s oversight of financial service providers in response to a pull-back from the Consumer Financial Protection Bureau.

The DFPI will replace the state’s Department of Business Oversight (DBO), which houses the Consumer Financial Protection Division, on Jan. 1, 2021. The department has enforcement and rulemaking authority over consumer protections.

What NYC’s collection rule means for lenders

New York City’s Department of Consumer and Worker Protection (DCWP) launched new debt-collection requirements in June for consumers whose primary language is not English. The new rules mean debt collectors must inform consumers of resources that are available in alternate languages, but experts say the effort does little to protect consumers who do not speak English.