CFPB’s Spring 2025 Regulatory Agenda: How Long to the Point of Know Return for the LO Comp and Servicing Rules?
The CFPB’s Spring 2025 Regulatory Agenda became available on the Office of Information and Regulatory Affairs (“OIRA”) website yesterday, September 4, 2025, along with the agendas of the other regulatory agencies (the Spring 2025 agenda apparently appeared briefly a couple weeks ago and then was taken down until yesterday). The CFPB’s agenda contains 24 active rulemaking items and one long-term item. Some of these rulemakings are especially important for the mortgage industry to watch. I will discuss these rulemakings below and provide some of my thoughts.
The most important proposed rules on the agenda for the mortgage industry are the following:
Rescission of the Loan Originator Compensation (“LO Comp”) Rule. I wrote about this potential proposed rule when the rulemaking was submitted to the Office of Management and Budget (“OMB”) for review (available here). Back then, all we had to go on for the subject matter of the proposal was the title of the rulemaking (it was assumed based on the word “rescission” that the proposal would be to rescind the LO Comp rule either in whole or in part). But now we have the CFPB’s summary of the proposal from its regulatory agenda, which states the following:
The Consumer Financial Protection Bureau (CFPB) is seeking Information in advance of preparing a proposed rule to rescind all or parts of the discretionary compensation provisions of the Bureau’s Loan Originator Compensation Requirements under the Truth in Lending Act (Regulation Z) Final Rule published on February 15, 2013. The CFPB is seeking information on the impact of rescinding all or parts of such compensation provisions of the Loan Originator Rule, and potentially certain related compensation provisions in the CFPB’s October 2013 Amendments to the Loan Originator Rule.
It is clear from this summary that the CFPB is considering a rescission of some or all of the LO Comp rule. See my earlier blog post for my discussion of some of the potential implications of such a rescission, which would leave the broad statutory prohibition in place (including a strange statutory provision regarding creditor-paid loan originator compensation).
Significantly, the agenda states that an Advance Notice of Proposed Rulemaking (“ANPR”) was expected to be issued in July 2025. The OIRA website indicates that OMB concluded its review of the rulemaking on June 26, 2025. This could indicate that this ANPR may be issued in the near future.
Discretionary Mortgage Servicing Rules under RESPA and TILA. I also wrote about these potential proposed rules in the same earlier blog post when they were submitted to OMB around the same time as the LO Comp ANPR described above. The CFPB’s description of these two rulemakings indicate that the CFPB is considering ANPRs for each, and the timing is listed as July 2025, like the LO Comp ANPR. As I suspected, the rulemaking will focus on the discretionary loss mitigation provisions. The CFPB describes the RESPA rulemaking as being focused on “requirements relating to servicer policies and procedures, early intervention with delinquent borrowers, continuity of contact, and procedures for evaluating and responding to loss mitigation applications,” and the TILA rulemaking as focused on “requirements relating to interest rate adjustment notices for variable-rate transactions.” The CFPB states that both ANPRs will solicit comments and information to help the CFPB “assess the costs and benefits” of these discretionary provisions so the CFPB can determine whether to “amend or rescind” the provisions. Like the LO Comp ANPR, because of the July 2025 timeframe listed in the agenda, these ANPRs may be issued soon.
Ability to Repay/Qualified Mortgages. The CFPB’s regulatory agenda contains one item in the “Long-Term Actions” section, which is a rulemaking titled “Ability to Repay/Qualified Mortgages.” The CFPB’s preamble to the regulatory agenda notes that while the other rulemakings on the main agenda are anticipated within a 12-month timeframe, for this “long term” rulemaking, “regulatory action is anticipated beyond that one-year time frame.” In fact, the CFPB does not provide a planned timeframe for this rulemaking, but instead states that the timeframe is “to be determined.”
Similarly, the specific issues and goals under the Ability to Repay/Qualified Mortgage (“ATR-QM”) rulemaking are vague. The CFPB’s agenda describes the rulemaking by giving a short synopsis of the statutory requirements and past ATR-QM rulemakings, and then merely states, “as the Bureau continues to monitor market developments, the Bureau will evaluate whether any further adjustments to ATR requirements and QM definitions are warranted.” I also reviewed the CFPB’s preamble to its regulatory agenda hoping it would provide more information regarding this rulemaking, but it is similarly vague. The preamble merely states that, “the CFPB has also added a new entry to the Agenda’s long-term section related to rules that require mortgage lenders to determine consumers’ ability-to-repay loans and define certain ‘qualified mortgages’ that are presumed to comply with statutory requirements.”
Perhaps the CFPB is merely listing this rulemaking because it is monitoring the mortgage market generally to see if any adjustments to the general QM or other QM definitions should be made. Or perhaps the CFPB actually has some specific issues under the current ATR-QM rule that it is concerned about. It will be interesting to see if the CFPB makes any statements about the ATR-QM rule in the next year, and how this rulemaking might change in the Fall 2025 regulatory agenda.
Equal Credit Opportunity Act (“ECOA”). The CFPB also plans to issue a proposed rule “to facilitate compliance with the Equal Credit Opportunity Act by clarifying the obligations imposed by the statute.” The proposed rule is planned for September 2025. This is an interesting entry, because it does not specify what changes to Regulation B the CFPB plans to propose. But there are some clues. Acting Director Vought’s interest in the Townstone case (which our law firm helped defend – and I’ve written about extensively in this blog) has been evident. In addition, President Trump signed a recent Executive Order declaring disparate impact theory unlawful in the view of the current administration. Further, the CFPB stated in an internal staff memorandum regarding its supervision and enforcement priorities back in April of this year (which I wrote about here) that, “will not engage in redlining or bias assessment supervisions or enforcement based solely on statistical evidence and/or stray remarks that may be susceptible to adverse inferences.” Based on this, this proposed rule may focus on removing support for the controversial and questionable disparate impact and redlining theories of discrimination from Regulation B. Particularly regarding redlining, the proposal may focus on the “discouragement” provision of Regulation B, which is what is used to support redlining cases under ECOA. That provision goes beyond the scope of ECOA, which applies only to “applicants,” and applies the discouragement prohibition to “prospective applicants.” The CFPB may propose to limit or rescind this provision entirely. We will keep an eye out for this proposal.
The Point of Know Return. While rulemakings on these issues (and others in the agenda) would be welcome, especially under ECOA, these rulemakings would not deal with the underlying problem with ECOA, TILA, and the other consumer finance statutes the CFPB oversees: the broad discretionary rulemaking authority given to the CFPB (and the Federal Reserve before it). Such statutory provisions generally allow the CFPB to issue rules it believes are necessary to further the purpose or prevent evasion of the statute. And unfortunately, courts, even after Loper Bright, have been deferential to the CFPB’s broad rulemaking authority, as I discussed on our firm’s podcast with respect to the 7th Circuit’s decision in the Townstone case. While the CFPB currently can rescind or amend these rules arguing that they were merely discretionary in the first place, CFPB leadership under the next Democrat administration could bring these rules back using this same authority. We know they will return (hence, my reference to the classic Kansas tune “Point of Know Return” in the title). The only way to permanently deal with these overreaching rules, and others in the future, is for industry to stand up to the agencies issues and enforcing these rules (so that courts can reject these rules in legal challenges) or for Congress to amend the statutes to delete the CFPB’s overly broad rulemaking authority.
Still Ready to RIF? Also, a lot of people have been talking about how this extensive rulemaking agenda is at odds with the CFPB’s well-known plans to conduct a RIF of the majority of CFPB staff (see here and prior blog posts). It is a full agenda, with 24 active rulemakings (some of which have already been issued and we’ve written about already – see here, here, and here). I think this rulemaking agenda would not prevent the CFPB from reducing its staff in parts of the agency that do not work on rulemakings, such as the Enforcement and Supervision offices. In addition, the CFPB could decide to hold off on a full-scale RIF of the CFPB’s Office of Regulations (and other offices that assist in rulemakings, like the Research office) until it completes these rulemakings. Further, if many of these rulemakings will be merely full, blanket rescissions of rules, rather than detailed, deep dives into complex regulatory issues, the agenda may not require as much effort, still allowing for some reduction of staff in these offices. This agenda may also show that the CFPB’s current acting leadership has changed its plans at least with respect to the rulemaking function, realizing that it can achieve meaningful regulatory reform, which may be better than entirely shutting down the agency (I discussed this issue here).
If you would like to discuss any of the issues in this blog post, would like assistance with submitting any comment letters, would like to discuss any of the rulemakings I did not summarize in this post, or comment on my Kansas reference, please email me at rich@garrishorn.com.
