REGULATORY DEVELOPMENTS

CFPB ISSUES DEBT COLLECTION RULE FAQS ON LIMITED-CONTENT MESSAGES AND CALL FREQUENCIES

On October 1, the CFPB released a new Compliance Aid in the form of a series of Frequently Asked Questions (FAQs) and responsive guidance, addressing limited-content messages and call frequency. The FAQs are intended to help collection agencies comply with the Fair Debt Collection Practices Act, including the new Debt Collection Final Rules (known as Regulation F) that go into effect on November 30, 2021.

SEC PROPOSES TO ENHANCE PROXY VOTING DISCLOSURE

On September 29, the SEC proposed amendments to Form N-PX with the goal of making it easier and more efficient for investors to analyze how funds vote. Form N-PX, adopted in 2003, requires funds to publicly report their proxy voting records on an annual basis. In practice, the SEC asserts that Form N-PX is hard for investors to use, understand and synthesize. The SEC argues that because mutual funds, ETFs and other registered management investment companies own about 30% of all U.S. corporate equities, and thus hold substantial voting power in the market, it is the right of the funds’ investors’ to easily analyze how the funds vote. Accordingly, the SEC’s Form N-PX rulemaking would require funds to (1) tie the description of each voting matter to the issuer’s form of proxy, (2) categorize each voting matter by type, (3) file their reports in a machine readable format that would allow investors to sort and filter data, (4) disclose how funds’ security lending activities impact their voting, and (5) disclose how institutional investment managers vote on executive compensation (“say-on-pay”) matters, fulfilling a rulemaking mandate under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The comment period is open for 60 days following publication in the Federal Register.

FEDERAL RESERVE ANNOUNCES NEW MESSAGE FORMAT FOR THE FEDWIRE^® FUNDS SERVICE

On October 4, the Federal Reserve announced that it will adopt a new message format developed by the International Organization for Standardization for the Fedwire® Funds Service. The format, ISO^® 20022, is expected to enhance efficiency of domestic and cross-border payments and will include greater payment data that may help compliance with sanctions and anti-money laundering requirements. The Federal Reserve also invited public comment on its revised plan to migrate to the new message format on a single day, rather than in a phased approach as previously proposed. Comments are due 90 days after publication in the Federal Register.

“Compliance Aids are not rules. Rather, they present the requirements of existing rules and statutes in a manner that is useful for compliance professionals, other industry stakeholders and the public."
– The CFPB