A bevy of new rules and proposed rules were issued last week. Most notable contributions come from the Bureau of Consumer Financial Protection (CFPB), Securities and Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC), Environmental Protection Agency (EPA), and Small Business Administration (SBA). On the management side, the Office of Management and Budget (OMB) has yet to release the Spring 2012 Unified Agenda despite pressure from Ohio Senator Rob Portman and the fact that the Fall 2012 Unified Agenda and Regulatory Plan is due soon.
Mortgage Financing: The CFPB released two proposed rules. The 2012 Real Estate Settlement Procedures Act (Regulation X) Mortgage Servicing Proposal would implement the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), requesting comment on seven mortgage servicing obligations:
- correct errors asserted by mortgage loan borrowers;
- provide information requested by mortgage loan borrowers;
- ensure that a reasonable basis exists to obtain force-placed insurance;
- establish reasonable information management policies and procedures;
- provide information about mortgage loss mitigation options to delinquent borrowers;
- provide delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account; and
- evaluate borrowers’ applications for available loss mitigation options.
CFPB conducted a small business review panel and published an initial regulatory flexibility analysis with the rule pursuant to the Regulatory Flexibility Act (RFA), and estimates that the proposed rule would impose 570,000 hours for one time changes and 2.4 million hours annually under the Paperwork Reduction Act (PRA).
CFPB’s 2012 Truth in Lending Act (Regulation Z) Mortgage Servicing proposed rule requests comments on Dodd-Frank amendments addressing:
- initial rate adjustment notices for adjustable-rate mortgages (ARMs);
- periodic statements for residential mortgage loans;
- prompt crediting of mortgage payments and response to requests for payoff amounts; and
- the scope, timing, content, and format of current disclosures to consumers occasioned by the interest rate adjustments of their variable-rate transactions.
CFPB again conducted the require RFA analysis and estimates that the approximately 25,000 one-time burden hours and 74,000 ongoing burden hours per year under the PRA. Their methodologies seem to be getting better, but only time will tell if their methodology is sound.
Two points are worth emphasis, though neither is novel:
♦CFPB, in both proposed rules, is participating in Cornell e-Rulemaking Initiative (CeRI) Regulation Room pilot project. These two rules appear to be good vehicles for testing the ratio of quality to quantity in non-aggregated against aggregated comments (like CeRI) and may illuminate a good tool.
♦CFPB provides a markup of the proposed text of the Code of Federal Regulations rather than merely the amendatory instructions. This is an improvement worth emulating because it can be very useful to readers
Conflict Minerals and Reporting: The Securities and Exchange Commission (SEC) published its Conflict Minerals and Disclosure of Payments by Resource Extraction Issuers final rules. These rules have been noted previously.
More Swaps: The Commodity Futures Trading Commission (CFTC) adopted final Swap Dealers and Major Swap Participants: Confirmation, Portfolio Reconciliation, Portfolio Compression, and Swap Trading Relationship Documentation Requirements on September 11, 2012. The rule establishes standards for timely and accurate confirmation of swaps, reconciliation and compression of swap portfolios, and documenting swap trading relationships.
♦The CFTC appears to take great pains to explain how it has reduced the burdens in adopting this final rule compared to its proposed rule.
♦At the same time, however, CFTC assigns disingenuous estimates for the cost of legal services when these costs have already been more finitely estimated, such as the SEC’s frequent use of $400 per hour for outside counsel.
Biomass Diesel: EPA released its Regulation of Fuels and Fuel Additives: 2013 Biomass-Based Diesel Renewable Fuel Volume after OMB completed review. As previous noted here, American Petroleum Institute v. EPA, D.C. Cir. No. 12-1330, already challenges the 2012 cellulosic biomass rule. This final rule applies to volume, not just cellulosic, and not percentage of total requirements, which, as EPA notes, will be subject to a separate proposed rule.
♦There may be a logic in the way EPA handles these rules, but it is not immediately apparent.
Size Still Matters: Last but never least, the SBA proposed adjustments to size standards for two more specific industry groups: Agriculture, Forestry, Fishing, and Hunting, and Finance and Insurance and Management of Companies and Enterprises.
♦SBA has undertaken a long and arduous process in updating the size standards, for which they should be commended.
Unified Agenda: Still unpublished, the Spring 2011 Unified Agenda has drawn the attention of Ohio Senator Rob Portman, a former Director of OMB, noting the long history of the Unified Agenda and OMB’s failure to publish in even close to a timely manner
The American people are entitled to know the full scope of your Administration’s regulatory agenda for the year ahead. In the interest of openness and transparency, I respectfully urge you to publish the long-overdue Spring 2012 Regulatory Agenda, as past presidents have done and the law requires.
♦No answer from OMB yet – still missing in action.