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The Crystal Ball: Compliance predictions for 2022Read Time: 2 mins
Welcome to my latest attempt at predicting what next year has in store for the auto finance industry. As I mentioned in last month’s column, there are a number of regulatory themes from 2021 that we can expect to carry over into the upcoming new year. One overarching theme that emerges is data privacy, and I predict we’ll see continued evolution in that area from a number of sources.
State regulation and regulatory bodies
While California created the Department of Financial Protection and Innovation as its own “mini-CFPB,” other states have stopped short of forming new regulatory bodies, only going so far as to rename or otherwise further empower existing agencies. Data privacy remains a topic of interest at the state level as witnessed by further amendments to California’s comprehensive laws and new laws in Colorado and Virginia that will be effective in early 2023. With the potential of something at the federal level, lenders would be well served to dedicate resources this year to getting cybersecurity compliance policies and procedures up to par and training staff appropriately.
The Chopra-era CFPB
With Director Rohit Chopra being confirmed to his post in late September, much remains to be seen about the CFPB’s priorities under the new administration. One move they’ve already signaled, however, is an interest in large industry participants and their use of big data. While the impact on auto lenders within that scope remains to be seen, we should expect increased investigations and enforcement in coming months.
Between activity at the state level, recent high-profile hacks, breaches and abuse of consumer information, and increased focus at the CFPB, will Congress be motivated to pass federal data privacy legislation 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 wants Congress to “get more into the details” particular to third-party data aggregators and payment processors. As every year, we’ll be keeping our eyes peeled for potential legislation from the Hill.
Outside of consumer privacy, we anticipate continued impacts from COVID-19 in 2022. Primarily, auto lenders will want to ensure that they’re following up on promises made during the peak of the pandemic in relation to servicing and collections.
Following on the topic of collections, we are all aware that the CFPB’s new rules under the Fair Debt Collection Practices Act, Reg F, took effect Nov. 30, 2021. While the CFPB has specifically noted that Reg F applies to third-party debt collectors, one wonders whether the more specific prohibitions in the new rules could be used as benchmarks for UDAAP claims against creditors.
Hopefully 2022 will be more predictable than the two preceding years. In any case, McGlinchey attorneys will keep you apprised of regulatory updates and compliance concerns in coming months. Watch this space for more updates, and happy new year to all!
This article was first published in Auto Finance Excellence, a sister service of Auto Finance News. McGlinchey is pleased to serve as the official Compliance partner of Auto Finance Excellence, providing insights and thought leadership through webinars, podcasts, and monthly columns.