Advisory Opinions Proposal
| Published date | 22 June 2020 |
| Citation | 85 FR 37394 |
| Record Number | 2020-13505 |
| Section | Proposed rules |
| Court | Consumer Financial Protection Bureau |
Federal Register, Volume 85 Issue 120 (Monday, June 22, 2020)
[Federal Register Volume 85, Number 120 (Monday, June 22, 2020)]
[Proposed Rules]
[Pages 37394-37396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13505]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Chapter X
[Docket No. CFPB-2020-0019]
Advisory Opinions Proposal
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Proposed procedural rule; proposed information collection;
request for comment.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) invites
the public to comment on a new advisory opinion program (Proposed AO
Program), and a proposed information collection associated with
requests submitted by persons requesting advisory opinions under the
Proposed AO Program, as required by the Paperwork Reduction Act of
1995.
DATES: Written comments on the Proposed AO Program are encouraged and
must be received on or before August 21, 2020.
ADDRESSES: You may submit comments on the Proposed AO Program,
identified by Docket No. [CFPB-2020-0019], by any of the following
methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Email: [email protected]. Include Docket
No. [CFPB-2020-0019] in the subject line of the email.
Mail/Hand Delivery/Courier: Comment Intake, Bureau of
Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552.
Please note that due to circumstances associated with the COVID-19
pandemic, the Bureau discourages the submission of comments by hand
delivery, mail, or courier.
Instructions: All submissions should include the agency name and
docket number. Because paper mail in the Washington, DC area and at the
Bureau is subject to delay, and in light of difficulties associated
with mail and hand deliveries during the COVID-19 pandemic, commenters
are encouraged to submit comments electronically. In general, all
comments received will be posted without change to http://www.regulations.gov. In addition, once the Bureau's headquarters
reopens, comments will be available for public inspection and copying
at 1700 G Street NW, Washington, DC 20552, on official business days
between the hours of 10 a.m. and 5 p.m. Eastern Standard Time. You can
make an appointment to inspect the documents by telephoning (202) 435-
9169. All comments, including attachments and other supporting
materials, will become part of the public record and subject to public
disclosure. Sensitive personal information, such as account numbers or
Social Security numbers, should not be included. Comments generally
will not be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: For additional information about the
Proposed AO Program, contact Marianne Roth, Chief Risk Officer, Office
of Strategy, at 202-435-7684. If you require this document in an
alternative electronic format, please contact
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act),\1\ the Bureau's ``primary functions'' include issuing
guidance implementing Federal consumer financial law.\2\ The Bureau
believes that providing clear and useful guidance to regulated entities
is an important aspect of facilitating markets that serve consumers.
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\1\ Public Law 111-203, 124 Stat. 2081 (2010).
\2\ 12 U.S.C. 5511(c)(5).
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The Bureau currently issues several types of guidance regarding the
statutes that it administers and regarding the regulations and Official
Interpretations that it normally issues through the notice-and-comment
process. On occasion, the Bureau provides guidance in interpretive
rules or general statements of policy. The Bureau also routinely issues
Compliance Aids that present legal requirements in a manner that is
useful for compliance professionals, other industry stakeholders, and
the public, or include practical suggestions for how entities might
choose to go about complying with those requirements.\3\ The Bureau
also provides individualized ``implementation support'' to regulated
entities through its Regulatory Inquiries Function (RIF).\4\ Neither
Compliance Aids nor the RIF are intended to interpret ambiguities in
legal requirements.
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\3\ See Policy Statement on Compliance Aids, 85 FR 4579 (Jan.
27, 2020).
\4\ See Bureau of Consumer Financial Protection Request for
Information Regarding Bureau Guidance and Implementation Support
(Guidance RFI), 83 FR 13959, 13961-62 (Apr. 2, 2018).
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The Bureau is presenting the Proposed AO Program in response to
feedback received from external stakeholders encouraging the Bureau to
provide written guidance in cases of regulatory uncertainty. This
feedback is summarized in the Background section of the Advisory
Opinions Pilot (AO Pilot) Federal Register document published elsewhere
in today's edition of the Federal Register. The Bureau issues this
request for public comment on the Proposed AO Program and associated
information collection concurrent with the establishment of the Pilot
AO Program. The Proposed AO Program represents the next phase in full
implementation of the Bureau's AO capability, with the intent of
replacing the AO Pilot, and allowing the Bureau to further provide
timely guidance that enables compliance by resolving outstanding
regulatory uncertainty, thereby supporting the Bureau's statutory
purpose of ensuring consumers have access to markets for consumer
financial products and services and that markets for consumer financial
products and services are fair, transparent, and competitive.
II. Parameters of the Proposed AO Program
A. Overview
The primary purpose of the Proposed AO Program is to provide a
mechanism through which the Bureau may more effectively carry out its
statutory purposes and objectives by better enabling compliance in the
face of regulatory uncertainty. Under the program, parties will be able
to request interpretive guidance, in the form of an AO, to resolve such
regulatory uncertainty.\5\
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\5\ For convenience, this document uses the term ``regulatory
uncertainty'' to encompass uncertainty with respect to regulatory
or, where applicable, statutory provisions.
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B. Submission and Content of Requests
Requests would be submitted through means, such as an email
address, designated by the Bureau. Parties requesting AOs will be
required to
[[Page 37395]]
submit certain information in order for a request to be complete; where
information submitted to the Bureau is information the requestor would
not normally make public, the Bureau intends to treat it as
confidential pursuant to its rule, Disclosure of Records and
Information,\6\ to the extent applicable. The Bureau encourages
requestors to identify any such information to the extent they choose
to include it in their submissions.
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\6\ 12 CFR 1070.
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The requestor must be identified, regardless of whether it is
submitting a request on its own behalf or submitting a request on
behalf of a third party (i.e., on behalf of one or more clients or
members). Outside counsel or a trade association, for example, could
submit a request for AOs on behalf of one or more clients or members,
and those entities would not need to be named. Additionally, if the
requestor is submitting a request on behalf of an unidentified third
party, the requestor must provide a statement on whether the
unidentified third party is the subject of an ongoing public Bureau
enforcement action or an ongoing Bureau enforcement investigation
conducted by the Bureau's Office of Enforcement.
The issue raised in the request must be within the Bureau's
purview,\7\ and the request must concern actual facts or a course of
action that the requestor is considering engaging in, with the
requestor providing a statement of whether the issue on which the AO is
being requested is the subject of any known or reasonably knowable
active litigation or federal or state agency investigations.
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\7\ Under title X of the Dodd-Frank Act (Consumer Financial
Protection Act of 2010), the Bureau was created to regulate the
offering and provision of consumer financial products and services
under federal consumer financial laws. 12 U.S.C. 5881. The Act
enumerates several consumer laws under the Bureau's jurisdiction (in
part or whole). 12 U.S.C. 5841(12).
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The requestor also must set forth as completely as possible all
material facts and circumstances, including detailed specification of
the legal question and supporting facts with respect to which the
requestor seeks an AO; and a proposed interpretation, identification of
the potential uncertainty or ambiguity that such interpretation would
address, and explanation of why the requested interpretation is an
appropriate resolution of that uncertainty or ambiguity.\8\ Requestors
may also choose to offer additional information, including, as
applicable, an explanation of the potential consumer benefits and risks
associated with resolution of the interpretive question and the
proposed interpretation; and an explanation of how the proposed
interpretation relates to the Bureau's statutory objectives.\9\
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\8\ The responsive AO will not necessarily adopt the requestor's
proposed interpretation. Under the proposed program, the Bureau
retains discretion to answer requests with its own interpretation
regardless of the requestor's proposed interpretation.
\9\ Requestors should describe relevant legal provisions and
arguments with as much specificity as practicable. The Bureau
recognizes that in some cases, the requestor may lack the legal
resources to provide a detailed and complete showing. In such
circumstances, the requestor should provide the maximum
specification practicable under the circumstances and explain the
limits on further specification.
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C. Characteristics of AOs
AOs under the proposed program will be interpretive rules under the
Administrative Procedure Act (APA) \10\ that respond to a specific
request for clarity on an interpretive question. The Bureau would
publish AOs in the Federal Register and on consumerfinance.gov,
including the Bureau's summary of the material facts and the Bureau's
legal analysis of the issue. Unless otherwise stated, each AO will be
applicable to the requestor and to similarly situated parties to the
extent that their situations conform to the Bureau's summary of
material facts in the AO.\11\
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\10\ 5 U.S.C. 553(b).
\11\ Accordingly, the initial request drafted by the requestor
is not necessarily a reliable guide to the scope or terms of an AO;
the scope and terms of an AO will be set out in the AO itself.
Moreover, the Bureau will not normally investigate the underlying
facts of the requestor's situation, and an AO is not applicable to
the requestor if the underlying facts of the requestor's situation
do not conform to the Bureau's summary of material facts.
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Where a statutory safe harbor is applicable to an AO, the AO will
explain that fact. The Truth in Lending Act (TILA), Equal Credit
Opportunity Act (ECOA), Electronic Fund Transfer Act (EFTA), and Real
Estate Settlement Procedures Act (RESPA) provide certain protections
from liability for acts or omissions done in good faith in conformity
with an interpretation by the Bureau.\12\ The Fair Debt Collection
Practices Act (FDCPA) contains similar protections, specifically using
the term ``advisory opinion.'' \13\
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\12\ See 15 U.S.C. 1640(f) (TILA); 15 U.S.C. 1691e(e) (ECOA); 15
U.S.C. 1693m(d) (EFTA); 12 U.S.C. 2617, 12 CFR 1024.4 (RESPA).
\13\ See 15 U.S.C. 1692(k)(e).
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D. Factors in Bureau Selection of Topics for AOs
The Bureau intends to consider the following factors as part of its
consideration of whether to address topics through AOs.\14\ The Bureau
will prioritize open questions within the Bureau's purview that can
legally be addressed through an interpretive rule, where an AO is an
appropriate tool relative to other Bureau tools for resolving the
identified uncertainty. Initial factors weighing for the
appropriateness of an AO include: That the interpretive issue has been
noted during prior Bureau examinations as one that might benefit from
additional regulatory clarity; that the issue is one of substantive
importance or impact or one whose clarification would provide
significant benefit; and/or that the issue concerns an ambiguity that
the Bureau has not previously addressed through an interpretive rule or
other authoritative source. Factors weighing strongly for presumption
that an AO is not an appropriate tool include that the interpretive
issue is the subject of an ongoing Bureau investigation or enforcement
action; that the interpretive issue is the subject of an ongoing or
planned rulemaking; that the issue is better suited for the notice-and-
comment process; that the issue could be addressed effectively through
a Compliance Aid; or that there is clear Bureau or court precedent that
is available to the public on the issue.
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\14\ The following are factors that the Bureau intends to weigh
when deciding which topics to prioritize in the advisory opinion
program, based on all of the information available to the Bureau.
Advisory opinion requests need not address these factors in order to
be fully considered by the Bureau.
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The Bureau intends to further evaluate potential topics for AOs
based on additional factors, including: Alignment with the Bureau's
statutory objectives; size of the benefit offered to consumers by
resolution of the interpretive issue; known impact on the actions of
other regulators; and impact on available Bureau resources. The
Proposed AO Program will primarily focus on the following statutory
objectives of the Bureau: (1) That consumers are provided with timely
and understandable information to make responsible decisions about
financial transactions; (2) that outdated, unnecessary, or unduly
burdensome regulations are regularly identified and addressed in order
to reduce unwarranted regulatory burdens; (3) that Federal consumer
financial law is enforced consistently, without regard to the status of
a person as a depository institution, in order to promote fair
competition; and (4) that markets for consumer financial products and
services operate transparently and
[[Page 37396]]
efficiently to facilitate access and innovation.\15\
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\15\ See 12 U.S.C. 5511(b)(1), (3)-(5). The Bureau has a further
statutory objective, that consumers are protected from unfair,
deceptive, or abusive acts and practices (UDAAPs) and from
discrimination. 12 U.S.C. 5511(b)(2). The Bureau considers this
objective to be at least as important as its other objectives, and
it does not plan to issue an AO that is in conflict with this
objective. But because other regulatory tools are often more
suitable for addressing UDAAPs and discrimination, the Bureau has
chosen not to highlight this objective as a primary focus when
selecting issues for the Proposed AO Program.
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The Proposed AO Program would focus primarily on clarifying
ambiguities in the Bureau's regulations, although AOs may clarify
statutory ambiguities. The Bureau will not issue AOs on issues that
require notice-and-comment rulemaking under the APA,\16\ or that are
better addressed through that process. For example, the Bureau does not
intend to issue an advisory opinion that would change a regulation.
Similarly, where a regulation or statute establishes a general standard
that can only be applied through highly fact-intensive analysis, the
Bureau does not intend to replace it with a bright-line standard that
eliminates all of the required analysis. Highly fact-intensive
applications of general standards, such as of the statutory prohibition
on unfair, deceptive, or abusive acts or practices, pose particular
challenges for issuing advisory opinions, although there may be times
when the Bureau is able to offer advisory opinions that provide
additional clarity on the meaning of such standards.
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\16\ 5 U.S.C. 553(b).
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The Bureau solicits comment on all aspects of the Proposed AO
Program. In particular, the Bureau solicits comment on: (a) Application
elements the Bureau should require from parties requesting AOs, and
accommodations that should be made for requestors with limited legal
resources; (b) how the Bureau should prioritize requests for AO
guidance; (c) how the Bureau should quantify benefit to consumers when
evaluating AO requests; (d) improvements that could be made to the
Proposed AO Program to further enhance compliance; (e) how the Bureau
should handle sensitive information submitted by requestors; and (f)
how the Bureau can make AO guidance that has not been incorporated into
the Official Interpretations codified in the Code of Federal
Regulations (or Commentary) available to the public in a useful format.
III. Regulatory Requirements
The Bureau has concluded that, if finalized, the Proposed AO
Program would constitute a rule of agency organization, procedure, or
practice, and that it would therefore be exempt from the notice-and-
comment rulemaking requirements of the APA.\17\ For the same reason, it
would not be subject to the 30-day delayed effective date for
substantive rules under the APA.\18\ Because no notice of proposed
rulemaking is required, the Regulatory Flexibility Act does not require
an initial or final regulatory flexibility analysis.\19\
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\17\ 5 U.S.C. 553(b).
\18\ 5 U.S.C. 553(d).
\19\ 5 U.S.C. 603(a), 604(a).
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IV. Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995 (PRA), Federal agencies
are generally required to seek approval from the Office of Management
and Budget (OMB) for information collection requirements prior to
implementation. Under the PRA, the Bureau may not conduct or sponsor,
and, notwithstanding any other provision of law, a person is not
required to respond to, an information collection unless the
information collection displays a valid control number assigned by OMB.
As part of its continuing effort to reduce paperwork and respondent
burden, the Bureau conducts a preclearance consultation program to
provide the general public and affected government agencies with an
opportunity to comment on the new information collection requirements
in accordance with the PRA (See 44 U.S.C. 3506(c)(2)(A)). This helps
ensure that: the public understands the Bureau's requirements or
instructions, respondents can provide the requested data in the desired
format without unnecessary burden.
The proposal would require a new information collection requirement
to submit an application to the Bureau to obtain an advisory opinion
from the Bureau. This information collection is voluntary. The likely
respondents would be for-profit businesses that are CFPB regulated
entities.
Title of Collection: Request for an Advisory Opinion.
OMB Control Number: 3170-00NEW.
Type of Review: Request for a new OMB Control Number.
Affected Public: Private Sector.
Estimated Number of Respondents: 100.
Estimated Total Annual Burden Hours: 6,000.
Abstract: The Bureau of Consumer Financial Protection (``CFPB'' or
``Bureau'') is proposing to establish an Advisory Opinion (AO) program.
AOs issued under the proposed program would be interpretive rules under
the Administrative Procedure Act (APA) that respond to a specific
request for clarity on an interpretive question regarding a CFPB-
administered regulation or statue. Under the program, parties would be
able to request interpretive guidance, in the form of an AO, to resolve
regulatory uncertainty. The Bureau would have discretion to decide
which AOs to respond to and would publish those with a description of
the incoming request for the public to review. The information will be
collected from persons, primarily business or other for-profit
entities, who request AOs from the Bureau. The information will be used
by the Bureau to determine whether to pursue the issuance of an AO
responsive to the request.
Documentation prepared in support of this information collection
request is available at www.regulations.gov.
Comments are invited on: (a) Whether the collection of information
is necessary for the proper performance of the functions of the Bureau,
including whether the information will have practical utility; (b) the
accuracy of the Bureau's estimate of the burden of the collection of
information, including the validity of the methods and the assumptions
used; (c) ways to enhance the quality, utility, and clarity of the
information to be collected; and (d) ways to minimize the burden of the
collection of information on respondents, including through the use of
automated collection techniques or other forms of information
technology. Please submit your comments in accordance with the
procedure outlined in the Addresses section of this notice above.
V. Signing Authority
The Director of the Bureau, having reviewed and approved this
document, is delegating the authority to electronically sign this
document to Laura Galban, a Bureau Federal Register Liaison, for
purposes of publication in the Federal Register.
Dated: June 18, 2020.
Laura Galban,
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2020-13505 Filed 6-19-20; 8:45 am]
BILLING CODE 4810-AM-P
