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FOS Blog

10 Jun

Compliance Priorities for 2022

Compliance Priorities for 2022

Every new Administration brings new expectations. The Trump administration oversaw a halt in new regulation, and a review of existing ones. The Biden administration has focused on equity and fairness; diversity, equity, and inclusion; climate change; fair lending; pandemic recovery; and UDAAP, to name a few.

It has taken 18 months to get the new regulatory priorities in place – and our sense of future compliance initiatives is only surfacing now.

Here are the general goals in the CFPB’s 2022-2026 Strategic Plan:

  • Implement and enforce the law to ensure consumers have access to fair, transparent, and competitive markets that serve consumers’ needs and protect consumers from unfair, deceptive, and abusive practices, and from discrimination.
  • Empower consumers to live better financial lives, focusing on traditionally underserved people.
  • Inform public policy with data-driven analysis on consumers’ experiences with financial institutions, products, and services.
  • Foster operational excellence and further commitment to workforce equity to advance the CFPB’s mission.

There is no regulatory agenda yet – as there was with the Spring / Fall 2021 rulemaking activities. But our anticipation of issues on the horizon includes the following:

Overdraft Reform – This is perhaps the hottest of all issues as regulators ponder how to use the FTC’s UDAP rule to make overdrafts more consumer friendly.  Regulators have been conducting back-room discussions with the largest banks and will eventually roll out more substantive rulemaking. Whether regulation, “guidance,” or opinion, overdrafts are a topic to watch.

1071 Finalization – This may be the big event of 2022. CFPB issued a proposal for collection and submission of data for small business applications in September 2021. A final rule is expected in mid-2022. There likely will be an 18-month implementation time frame so banks would not need to comply until 2024 (collection of 2023 data), but banks should begin preparations.

(BSA) Beneficial Ownership Database – The Corporate Transparency Act of 2020 requires the creation of a federal database for beneficial ownership information. In April of 2021, FinCEN issued a proposal but has said that it will be a “phased in process.”  We await the start of these rulemakings.

CRA Reform – With the OCC withdrawing its regulatory changes, the agencies are working toward a combined approach. We expect to see early requests for information in 2022.

Mortgage Servicing – The temporary COVID moratorium on mortgage servicing has ended and regulators will shift to “avoidable foreclosures.”  They will examine collections and foreclosure communications with distressed borrowers. What loss mitigation steps have you taken?

Racial Bias in Appraisals – There has been much discussion from HUD, the CFPB, and the FFIEC on bias in appraisals.  An International Task Force on Property Appraisal and Valuation Equity (PAVE) has been formed among the principal banking regulators.  It’s been brewing for several years so expect to see a proposal sometime soon.

AVM Rules – The Dodd Frank Act of 2010 amended the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) to require rules to address quality control standards for AVMs, which use databases to form estimated property values. A proposal is expected in mid-2022, and those relying on AVMs may need to incorporate new standards.

Climate Change Risk – President Biden has issued a broad executive order for all agencies to take steps to mitigate climate-related risks. This is manifesting itself in Environmental, Social, and Governance (ESG) investing. It is first falling to the SEC to develop disclosures, but the CFPB is expected to bring banking regulations.

Cybersecurity – This risk has been heightened with Russia’s attack on Ukraine. It is expected that Russia will retaliate on the U.S. with increased cybersecurity attacks, and the entire banking industry is at high-risk.

The allocation of your compliance resources continues to be challenging. Compliance is not waning and more resources, particularly human resources, will be needed. For further discussion on any of these topics, please contact one of our professionals.

For additional information contact the author Evelyn Dehmey at