On 1/5/2021, the CFPB’s Taskforce on Federal Consumer Financial Law released a report with recommendations on how to improve financial consumer protection. The Taskforce Report uses five interrelated principles that serve as the foundation for proposed systematic changes to the current legal and regulatory framework: consumer protection, information and education, competition and innovation, regulatory modernization and flexibility, and inclusion and access.
The Taskforce, which was created by the CFPB in January 2020, has examined the existing legal and regulatory environment facing consumers and financial services providers. The Taskforce’s report discusses what it learned during its examination and outreach to stakeholders and offers recommendations for the future of consumer financial protection.
In its report, the Taskforce makes approximately 100 recommendations to the Bureau, Congress, and state and federal regulators to strengthen consumer protection. Among the Taskforce recommendations are the following (listed in no particular order):
Authorize the Bureau to issue licenses to non-depository institutions that provide lending, money transmission, and payments services;
Expand access to the payment system by unbanked and underbanked consumers and ensure consistent treatment by applying the same rules to similar financial products;
Identify competitive barriers and make appropriate recommendations to policymakers and regulators for expanding access to the payments systems by non-bank providers;
Research and develop policies tailored to the unique challenges of formerly incarcerated people, and work with state and federal authorities to improve protection of this population;
Research and develop policies to address problems of financial inclusion in rural communities;
Facilitate creditor access to immigrants’ credit information prior to their arrival in the United States in order to use that information in credit decisions;
Research consumer reporting issues that arise in connection with a consumer’s bankruptcy;
Consider the benefits and costs of preempting state law where conflicts can impede the provision of valuable products and services, such as the regulation of FinTech companies engaged in money transmission;
Identify opportunities to coordinate regulatory efforts. For example, the Bureau and prudential regulators should eliminate overlapping examination subject areas and reconcile inconsistent examination standards that unnecessarily expend multiple resources and can cause confusion;
Continue to increase dialogue with state regulators to bridge knowledge gaps and streamline regulation;
Work with other agencies to create a unified regulatory regime for new and innovative technologies providing services similar to banks;
Establish independent review of the Bureau’s regulatory cost-benefit analyses by staffing an office of cost-benefit analysis at the Bureau and or by submitting its analyses to OIRA for review;
Evaluate any positive or negative effect on inclusion as part of the Bureau’s cost-benefit analyses as appropriate;
Exercise caution (a recommendation for the Bureau, Congress, and other federal and state regulators) in restricting the use of nonfinancial alternative data, which can be very useful indicators of creditworthiness.
Clarify the obligations of CRAs and furnishers with respect to disputes under the FCRA;
Assess periodically the accuracy and completeness of consumer credit reports.
The Taskforce report is divided up into two volumes and can be found here: