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Veritec Releases Response to Proposed CFPB Rules


Jacksonville, Fla., October 26, 2016 – Veritec Solutions LLC, the industry leader in real-time regulatory solutions, submitted comments on October 6th in response to the Notice of Proposed Rulemaking on Payday, Vehicle Title, and Certain High-Cost Installment Loans released by the Consumer Financial Protection Bureau (CFPB).

For over 15 years, Veritec has managed regulatory database programs spanning 14 states. Our expertise in the industry stems from our extensive experience in the payday, vehicle title, and installment loan sector, as well as the strong relationships developed with regulators, lenders, and consumers. Veritec’s response includes the following topics in the proposed rule:

Registered Information Systems (RIS)

The CFPB’s proposed multiple RIS report-to-all, check one approach should be streamlined to reduce high costs and burdens to lenders created by this “one-to-many” environment that requires lenders to enter redundant information into numerous different systems.

The Need for Real-Time Data Furnishing and Reporting

Real-time data capture and reporting is required to enable lender compliance with consumer protections under the proposed rule. For audit purposes, regulators must know when qualifying information became available to a lender to ensure compliance for every transaction recorded. The application of a real-time policy enables lenders to adhere to regulations based on real-time nationwide information, allowing lenders to issue only the loans for which all requirements have been met.

States Currently Using Real-Time Enforcement

Roughly half of states that regulate small-dollar lending use a statewide regulatory database for real-time enforcement. Licensed small dollar lending activity in these states is 100% compliant with state laws which effectively address unfair, deceptive, and abusive acts or practices. Veritec challenges the CFPB’s findings which did not include research and analysis of entire datasets from several of these states which were made available to the CFPB. Analysis of data from these states contrasts effectiveness of consumer protections in these environments compared to states with no real-time enforcement.

Data Standards­­­­

Veritec expressed the importance of common RIS standards and concern about the Bureau’s proposed process to foster development of standards across the RIS environment.

Confidentiality of Personal Information

The use of a consumer report from an RIS under the proposed rule may conflict with state laws that protect the privacy of personally identifying information (PII) and limit the use of PII.

Read Veritec’s entire 61-page response

Download the CFPB’s Notice of Proposed Rulemaking on Payday, Vehicle Title, and Certain High-Cost Installment Loans