Federal, Regulation

Fed seeks comment on proposed repeal of consumer rules

126px-US-FederalReserveSystem-Seal.svg_3The Federal Reserve issued a request for public comment last week on changes to fair credit reporting standards and proposals to repeal two rules aimed at helping consumers compare deposit accounts and ensure the privacy of consumer data.

Under the 2010 Dodd-Frank Act, rulemaking authority related to a number of consumer financial protection rules was transferred from the Fed to the CFPB.

The Fed is proposing the elimination of Regulation DD and Regulation P—the Truth in Savings and Privacy of Consumer Financial Information rules—because the CFPB has already issued interim final rules identical to the Fed board’s own rules.

Regulation DD, which historically implemented the Truth in Savings Act, requires the disclosure of fees, APR yield, interest rate and other account terms to consumers to allow them to more easily shop comparable deposit accounts.

Regulation P, which implemented part of the Gramm-Leach-Bliley Act, limits the circumstances in which a financial institution may be able to disclose nonpublic consumer information to non-affiliated third parties and requires certain privacy notices to be provided to consumers.

The board is also seeking comment on changes to Regulation V that would require financial institutions and creditors to implement identity theft prevention programs.

The Fed proposed revising the rule to reflect changes to the Fair Credit Reporting Act to clarify that the provisions apply only to creditors that regularly extend credit or obtain consumer credit reports.

The amendments seek to narrow the scope of law so it is not applied to professionals such as doctors and lawyers, who sometimes allow the consumer to make payments on an account.

Comments on the repeal of the rules and changes to the fair credit reporting standards are due 60 days from the date of publication in the Federal Register, which is expected in coming weeks.

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