Public policy predictions 2022: what’s coming for financial services


The past year has been a year of transition in the political arena of Washington, DC, as a new President, Congress and a group of bank agency heads have taken over the financial, legislative and policy agenda. regulatory. Now, almost a year after this pendulum shift in political power began, there is greater clarity on what could happen to us. This is the time of year for forecasts, and with the knowledge gained from 2021, I am ready to offer some public policy forecasts for players in the financial services industry.

1. Open Banking begins to take off in the United States with new rules promulgated by the CFPB

The United States is lagging behind EU and UK, where the Open Banking policy and standards are firmly in place. However, 2022 should mark a change. After more than a decade of waiting, the Bureau of Consumer Financial Protection will issue long-awaited regulations, in accordance with the section 1033 of the Dodd-Frank Act, which offer consumers a right of access to their financial information. FICO is following these developments closely as we believe the power of consumer-enabled data holds great promise. One of our latest innovations in credit score, the UltraFICOTM Score, leverages consumer-authorized bank account information that is central to Regulation 1033.

2. Debt collectors and service providers can work together again without fear of violating the FDCPA

You would think the new CFPB collection rules, which went into effect last month on November 30, would be the primary focus of the collection and salvage industry. However, an April 2021 ruling by one of the country’s federal appeals courts (the level just below the U.S. Supreme Court) sent shockwaves through the industry. the Hunstein v. Preferred Collection and Management Services, Inc. case involves an allegation that a debt collector violated the Fair Debt Collection Practices Act (FDCPA) by sending personal information about the debtor to a print provider who prepared and sent a dunning letter on behalf of the debt collector. The decision of three judges from the 11th Circuit Court of Appeal surprised the industry, which has long relied on service providers to facilitate compliance and other related services on behalf of debt collectors.

The decision immediately triggered a wave of lawsuits. The initial panel of three judges subsequently doubled their initial decision by Hunstein II when considering the impact of detention in the recent Supreme Court case, TransUnion LLC v. Ramirez. However, on November 17, the 11th Circuit overturned its Hunstein II decision and order that the case be heard in bench by the 12 judges of the 11th circuit. I predict that by mid-2022, the 11th Circuit will conclude that Hunstein’s original decision was made in error and that order will be restored between debt collectors and their service providers.

3. Despite a wave of new product innovations, new discovery rules are on the way

Perhaps no area in the financial services space has seen more change and attention in recent months than overdraft practices. A number of banks recently announced new changes, which range from more liberal policies and grace periods to the complete elimination of overdraft fees.

Despite these changes, regulators still believe more scrutiny is needed. CFPB Director Rohit Chopra recently declared that in addition to increased enforcement and oversight efforts in this area, the Bureau “will consider a series of regulatory interventions to help restore meaningful competition in this market …” OCC Acting Monitor Michael Hsu , also weighed in on the subject in a December 8 report word which included highlighting eight characteristics of an overdraft program that help support healthy financial health.

However, it was another comment from Acting Controller Hsu that revealed that new rules are on the horizon. Hsu said industry reforms alone will not be enough. He noted that “… although previous regulatory efforts may have prevented harmful overdraft practices from increasing, they have not resulted in substantial and lasting improvements. going forward, despite efforts at banking reform. “Clearly, more change is to be expected and, given the rapidly changing overdraft landscape, Glenn Grossman, FICO’s depository SME, recently shared his knowledge on a new approach to discovery.

4. For the first time in a long time, the TCPA policy front will be relatively silent.

For years, I have spoken of the need for action by the FCC or members of Congress to clear up the gray areas related to the Consumer Protection Act by Telephone (TCPA). While neither body found consensus to implement changes, 2021 saw some key areas of concern addressed by the launch of the FAC Reassigned Numbers Database and one major court case related to the TCPA definition of an Automatic Telephone Numbering System (ATDS). While there are still other issues that will fuel TCPA litigation, I predict 2022 will be a year of relative hiatus on the regulatory and legislative front to determine how the recent developments of 2021 play out.

5. Financial inclusion policy proposals will continue to promote the promise of alternative data

The emphasis on financial inclusion and increasing access to credit has been an area that regulators and political leaders on Capitol Hill have emphasized. At the center of these discussions is the impact that alternative data (for example, telecommunications, utility, rent, and bank account information that currently resides outside of credit bureau records) can provide credit bureau lenders. new consumer information.

In 2022, congressional leaders will consider proposals such as the Credit Access and Inclusion Act and Veterans Access to Credit Act that focus on the benefits of alternative data. In addition, CFPB, OCC and ATH executives have all made public statements encouraging lenders to explore the opportunities offered by special purpose credit programs (SPCPs). It is likely that future SPCPs will also include the use of alternative data.

Well, here are my five predictions. Of course, I intentionally avoided the BIG prediction: who will have party control over the House and Senate after the 2022 election? Given the twists and turns of the recent US election, I will stay away from any commentary and prognosis on the election, but hopefully I will be back with a 2023 forecast after the November 2022 results. Stay tuned!


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