In the first installment of Seyfarth's 2021 monthly Consumer Financial Services Webinar Series held on February 24, 2021, attorneys David M. Bizar, Tonya M. Esposito and J. Patrick Kennedy discussed the major legislative initiatives, regulatory and enforcement, and executive actions that are likely to be prioritized by the Biden-Harris administration; the key financial department appointees of the new administration; and the continuing impacts of the COVID-19 pandemic, particularly on the status of federal foreclosure and eviction moratoria.
As a conclusion to this webinar, we developed a summary of key takeaways:
- Until the COVID-19 pandemic subsides, CARES Act provisions providing for mortgage payment forbearance and foreclosure eviction moratoria will continue to cause disruptions in the consumer lending and mortgage servicing marketplaces. With the administration change following the November election, new legislative initiatives will be heavily consumer-focused, and enforcement of consumer laws by the CFPB and other executive agencies will dramatically increase. Fintech, student lending and smaller-dollar consumer products such as payday loans are expected to be a particular focus under new CFPB Director Rohit Chopra.
- The Biden-Harris administration's financial department appointees are smart; consumer-focused; experienced in leading important consumer initiatives in prior Democratic administrations; and are expected to be aggressive in their enforcement and rule-making positions.
- The federal eviction and foreclosure moratoria have been formally extended due to the continuing COVID-19 pandemic through March 31, 2021, will be extended further until June 30, 2021, and absent a dramatic improvement in conditions related to COVID-19 are expected to be in place through at least September 2021. Federal restrictions generally take precedence over state-law restrictions, unless state bans are more inclusive. These moratoria will result in increasing numbers of mortgage loans in default status, requiring more default servicing and foreclosure resources for banks and other financial servicers once the pandemic subsides.
Banks and financial institutions should review their compliance protocols and procedures, and be prepared for increased scrutiny by federal regulators during the Biden-Harris administration. Our next scheduled event in the monthly Consumer Financial Services Webinar Series will be held on March 25, 2021, and will explore the recently-issued CFPB Taskforce Report and Recommendations.
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