[House Report 115-1095]
[From the U.S. Government Publishing Office]


115th Congress    }                                    {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                    {      115-1095

======================================================================



 
       GIVE USEFUL INFORMATION TO DEFINE EFFECTIVE COMPLIANCE ACT

                                _______
                                

 December 21, 2018.--Committed to the Committee of the Whole House on 
                                  the
              State of the Union and ordered to be printed

                                _______
                                

       Mr. Hensarling, from the Committee on Financial Services,
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 5534]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 5534) to amend the Consumer Financial Protection 
Act of 2010 to provide procedures for guidance issued by the 
Bureau of Consumer Financial Protection, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Give Useful Information to Define 
Effective Compliance Act'' or the ``GUIDE Compliance Act''.

SEC. 2. PROCEDURES FOR BUREAU GUIDANCE.

  Section 1022(b) of the Consumer Financial Protection Act of 2010 (12 
U.S.C. 5512(b)) is amended by adding at the end the following:
          ``(5) Procedures for bureau guidance.--
                  ``(A) Definitions.--In this paragraph--
                          ``(i) the term `Bureau' means--
                                  ``(I) the Director of the Bureau;
                                  ``(II) the Deputy Director of the 
                                Bureau; and
                                  ``(III) any employee of the Bureau 
                                described in section 1013(a)(1)(B); and
                          ``(ii) the term `guidance'--
                                  ``(I) means--
                                          ``(aa) an agency statement of 
                                        general applicability and 
                                        future effect, other than a 
                                        regulatory action, that sets 
                                        forth a policy on a statutory, 
                                        regulatory, or technical issue 
                                        or an interpretation of a 
                                        statutory or regulatory issue; 
                                        and
                                          ``(bb) any written 
                                        interpretive rule, bulletin, 
                                        statement of policy, letter, 
                                        examination manual, frequently 
                                        asked question, notice, 
                                        directive, news release, blog 
                                        post, small entity compliance 
                                        guide, or other authoritative 
                                        document issued by the Bureau 
                                        regarding compliance with a 
                                        Federal consumer financial law; 
                                        and
                                  ``(II) does not include--
                                          ``(aa) a purely internal 
                                        Bureau policy;
                                          ``(bb) a law enforcement 
                                        communication such as a 
                                        complaint, consent order, 
                                        judgment, legal opinion, 
                                        warning letter, investigatory 
                                        letter, notice of hearing, 
                                        civil investigative demand, 
                                        subpoena, no-action letter, 
                                        advisory opinion, or any 
                                        request in lieu of the 
                                        foregoing;
                                          ``(cc) an individualized 
                                        supervisory communication such 
                                        as a supervisory letter, report 
                                        of examination, memorandum of 
                                        understanding, board 
                                        resolution, matter requiring 
                                        attention, or individualized 
                                        communication or agreement 
                                        pursuant to the supervisory 
                                        authority of the Bureau; or
                                          ``(dd) a decision issued 
                                        under subtitle E.
                  ``(B) Guidance requirements.--The Director shall 
                issue guidance that is necessary or appropriate to 
                enable the Bureau to carry out Federal consumer 
                financial law, including facilitating compliance with 
                such law.
                  ``(C) Rulemaking.--
                          ``(i) Proposed rule.--Not later than 18 
                        months after the date of enactment of this 
                        paragraph, the Bureau shall publish in the 
                        Federal Register and on the website of the 
                        Bureau a proposed rule defining--
                                  ``(I) each type of guidance the 
                                Bureau shall provide;
                                  ``(II) the criteria the Bureau shall 
                                use for selecting each type of 
                                guidance;
                                  ``(III) the process and timelines for 
                                requests for guidance;
                                  ``(IV) the time periods for the 
                                response of the Bureau to a request for 
                                each type of guidance; and
                                  ``(V) a process for amending or 
                                revoking guidance issued under the 
                                rule, including a process for public 
                                input on any proposal to amend or 
                                revoke guidance, unless the Bureau 
                                determines public input is not required 
                                due to public exigency.
                          ``(ii) Final rule.--Not later than 1 year 
                        after the date on which the proposed rule 
                        described in clause (i) is published, the 
                        Bureau shall publish a final rule based on the 
                        proposed rule.
                  ``(D) Reliance on bureau guidance.--No person shall 
                be held liable for any act done or omitted in good 
                faith in conformity with any applicable guidance from 
                the Bureau or any predecessor agency that was in effect 
                at the time of the act or omission, even if the 
                guidance is later revoked, amended, or rendered 
                inconsistent by guidance or action by the Bureau or a 
                determination by a court of competent jurisdiction.
                  ``(E) Development of a penalty matrix.--
                          ``(i) Proposed rule.--Not later than 18 
                        months after the date of the enactment of this 
                        subparagraph, the Bureau shall publish in the 
                        Federal Register and on the website of the 
                        Bureau a proposed rule establishing guidelines 
                        for determining the size of any civil monetary 
                        penalties issued by the Bureau based on the 
                        severity of the actionable conduct in violation 
                        of a Federal consumer financial law and the 
                        level of culpability. The regulations 
                        prescribed under this paragraph shall, to the 
                        extent possible, align with any chart, matrix, 
                        rule, or guideline published by the Office of 
                        the Comptroller of the Currency, the 
                        Corporation, or the Board of Governors.
                          ``(ii) Final rule.--Not later than 1 year 
                        after the date on which the proposed rule 
                        described in clause (i) is published, the 
                        Bureau shall publish a final rule based on the 
                        proposed rule.''.

                          Purpose and Summary

    Introduced by Representative Sean Duffy on April 17, 2018, 
H.R. 5534, the ``Give Useful Information to Define Effective 
(GUIDE) Compliance Act'' amends the Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) 
[Pub. L. 111-203] to provide procedures for guidance issued by 
the Bureau of Consumer Financial Protection (BCFP), including 
guidance necessary to comply with the law, establishes clear 
standards for that guidance and how it is issued, and provides 
a safe harbor for good faith reliance on guidance issued by the 
Bureau.

                  Background and Need for Legislation

    Since its inception in 2010, the Bureau of Consumer 
Financial Protection has operated outside of the expected norms 
for a federal supervisory agency. Criticisms against the Bureau 
include rulemaking driven by political motivations\1\, 
regulation through enforcement\2\, and the tendency to stretch 
the Bureau's statutory authority or use novel interpretations 
of existing law to support the Bureau's enforcement and 
litigation.\3\ The Bureau's former Director, Richard Cordray, 
stated:
---------------------------------------------------------------------------
    \1\Gary Davis, ``Why Reform is Necessary at the CFPB.'' (Feb. 2017) 
Available at https://www.forbes.com/sites/forbesfinancecouncil/2018/02/
07/why-reform-is-necessary-at-the-cfpb/#14a06ba747fa.
    \2\https://www.mba.org/issues/residential-issues/cfpb-enforcement-
concerns.
    \3\Michael Grunwald, ``Trump Wants to Dismantle Elizabeth Warren's 
Agency. Good Luck With That.'' (Dec. 2017) Available at https://
www.politico.com/magazine/story/2017/12/03/trump-cfpb-elizabeth-warren-
215997.

          ``We wanted to send a message: There's a new cop on 
        the beat. Pushing the envelope is a loaded phrase, but 
        that's absolutely what we did.''\4\
---------------------------------------------------------------------------
    \4\Id.

    Under the previous Director's watch this created an uneven 
playing field for financial services businesses. The Bureau's 
consumer complaint portal, an unverified public complaint 
database of financial service providers and products, was not 
an accurate indicator of the Bureau's next rulemaking 
initiative. Litigation and enforcement actions could not be 
relied upon to set an industry precedent on which businesses 
could rely. Previously accepted industry practices could be 
cause for future litigation from the Bureau.\5\ Ultimately, 
instead of fulfilling the BCFP's mandate to protect consumers, 
its actions achieved the opposite result. Banks stopped 
offering certain products for fear of litigation and did not 
introduce new products because of compliance costs and 
potential legal liability. Credit availability then tightened 
for consumers and businesses, reduced access to mortgage credit 
for families looking to purchase a home and limited s options 
for businesses looking to expand.
---------------------------------------------------------------------------
    \5\supra note 2. ``The CFPB has published key consent orders and 
decisions-including under the Real Estate Settlement Procedures Act 
(RESPA)-that diverge from prior rules and interpretations of the 
Department of Housing and Urban Development (HUD) that the industry has 
relied on for decades.''
---------------------------------------------------------------------------
    This approach to consumer protection has been reversed by 
BCFP Acting Director Mick Mulvaney, who in a memo to staff upon 
his arrival signaled that the Bureau would commit to enforcing 
the rule of law and no longer be ``pushing the envelope.''\6\ 
In his memo, Acting Director Mulvaney also promised to engage 
in more formal rulemakings, only bring lawsuits based on 
``quantifiable and unavoidable harm'', employ a data based 
approach to rulemaking, and engage in more robust cost-benefit 
analysis. While this fresh perspective is welcome, it is 
necessary for Congress to ensure consumers and businesses 
remain protected should a subsequent Director choose to stray 
from this new direction. In the same memo to Bureau staff, 
Acting Director Mulvaney appropriately noted that:
---------------------------------------------------------------------------
    \6\See https://www.consumerfinancemonitor.com/wp-content/uploads/
sites/14/2018/01/Mulvaney-memo.pdf.

        We are government employees, and we work for the 
        people. That means everyone: those who use credit cards 
        and those who provide the credit; those who take out 
        loans and those who make them; those who buy cars and 
        those who sell them. All of those people are part of 
        what makes this country great, and all of them deserve 
        to be treated fairly by their government.\7\
---------------------------------------------------------------------------
    \7\Id.

    The new approach to consumer financial regulation by the 
BCFP demonstrates not only the intent of Congress but also fair 
and equal treatment for all market participants from the 
customer to the businesses that serve them. This fair, equal, 
and transparent system will help foster economic growth and 
ensure all Americans have equal access to the financial system 
and wide array of products to serve their individual and 
specific needs.

              FORMALIZING THE GUIDANCE PROCESS AT THE BCFP

    Guidance can play an integral role in business decision 
making. Clear, reliable guidance can provide businesses with 
reliable information to form the basis for making decisions and 
investments without concern that their actions could lead to 
enforcement orders or fines in the future. Guidance can also 
improve the supervision process as examiners have an easier 
time determining compliance with additional reference points. 
Therefore, it is good policy to encourage regulators to share 
insights on how to comply with their rules.
    There are several examples of finalized rules from the BCFP 
that lack the necessary guidance to provide much needed clarity 
for businesses. For instance, during the Financial Institutions 
Subcommittee's hearing examining reforms to improve 
transparency and accountability at the Bureau, the President of 
the American Land Title Association (ALTA), Steven Day, shared 
examples where Bureau guidance would have helped to clarify 
confusing rules. Specifically, Mr. Day referred to compliance 
hurdles associated with the BCFP's TILA-RESPA Integrated 
Disclosure (TRID) rule, where the Bureau hosted webinars but 
did not provide written guidance, causing headaches in sharing 
this information with inquiring customers.\8\ In his testimony 
Mr. Day also compared the guidance shared by federal regulators 
concerning third-party service providers:
---------------------------------------------------------------------------
    \8\United States. Cong. House. Committee on Financial Services. 
Hearing on Improving Transparency and Accountability at the Bureau of 
Consumer Financial Protection Bureau. June 6, 2018. 115th Cong. 2nd 
sess. (statement of Steven G. Day, American Land Title Association). 
Available at https://financialservices.house.gov/uploadedfiles/hhrg-
115-ba15-wstate-sday-20180606.pdf.

          ``Unlike similar guidance from prudential regulators, 
        the Bureau's bulletin provided little direction to 
        banks and nonbanks. The Bulletin was two and a half 
        pages long, compared with 16 pages of guidance from the 
        Office of the Comptroller of the Currency (OCC) and the 
        14-page document from the Federal Reserve Board.''\9\
---------------------------------------------------------------------------
    \9\Id. at 11-12.

    To resolve this issue, the GUIDE Compliance Act creates a 
process for the BCFP to issue formal and reliable written 
guidance\10\ on how to comply with its written regulations 
along with the creation of a civil money penalty matrix similar 
to those used by all other federal financial regulators. 
Guidance developed under the GUIDE Compliance Act is designed 
to interpret requirements of a regulation that was adopted as 
part of a formal Administrative Procedures Act (APA) process.
---------------------------------------------------------------------------
    \10\Guidance can come in the form of advisory opinions, bulletins, 
no-action letters, statements of policy, and answers to Frequently 
Asked Questions (FAQs).
---------------------------------------------------------------------------

                                Hearings

    The Subcommittee on Financial Institutions held a hearing 
examining matters relating to H.R. 5534 on June 6, 2018.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
September 13, 2018, and ordered H.R. 5534 to be reported 
favorably to the House, as amended, by a recorded vote of 38 
yeas to 14 nays (recorded vote no. FC-206), a quorum being 
present. Before the motion to report was offered, the Committee 
adopted, by voice vote, an amendment in the nature of a 
substitute offered by Mr. Duffy.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the as amended. The motion was 
agreed to by a recorded vote of 38 yeas to 14 nays (Record vote 
no. FC-206), a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 5534 
will help to clarify any new guidance issued by the BCFP in 
order to make guidance clear and succinct for implementation.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, December 19, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5534, the GUIDE 
Compliance Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 5534--GUIDE Compliance Act

    H.R. 5534 would require the Consumer Financial Protection 
Bureau (CFPB) to issue guidance to facilitate compliance with 
federal consumer financial laws. The agency would be required 
to issue rules that define various types of guidance; establish 
a procedure for issuing, amending, and revoking guidance; and 
develop a process for receiving public input on guidance. H.R. 
5534 also would require the CFPB to establish guidelines to 
determine the size of civil monetary penalties imposed by the 
agency.
    Using information from the CFPB, CBO estimates that 
enacting the bill would require the agency to hire four 
employees to handle the preparation of the additional guidance 
that the agency would be required to issue and to implement new 
procedures for issuing guidance. CBO estimates those efforts 
would cost $1 million annually, beginning in 2021. In addition, 
CBO estimates that it would cost the agency about $1 million to 
issue the required rules under the bill. (Spending by the CFPB 
is considered direct spending.) Over the 2019-2028 period, CBO 
estimates that implementing the bill would increase direct 
spending by $9 million.
    Under H.R. 5534, the CFPB also would be required to issue a 
rule to establish new guidelines for determining the size of 
the civil monetary penalties it issues and to align those 
guidelines with those published by other financial regulators. 
CBO estimates that amending current agency penalty guidelines 
would affect civil penalties collected by the CFPB (which are 
recorded in the budget as revenues) and the subsequent direct 
spending of those penalties. However, because any changes would 
be dependent on the outcome of future agency rules, CBO has no 
basis to determine whether future civil monetary penalties 
would be higher or lower than under current law.
    Because enacting H.R. 5534 would affect direct spending and 
revenues, pay-as-you-go procedures apply.
    CBO estimates that enacting H.R. 5534 would not increase 
net direct spending or on-budget deficits by more than $5 
billion in any of the four consecutive 10-year periods 
beginning in 2029.
    H.R. 5534 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires 
directed rule makings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 5534 as the ``Give Useful 
Information to Define Effective Compliance Act''

Section 2. Procedures for Bureau guidance

    This section cites the requirements to be carried out by 
the Director in issuing guidance that is necessary and 
appropriate to enable the Bureau to carry out Federal consumer 
financial law, including facilitating compliance with such law. 
This section also sets forward the definition for guidance as 
well as the proposed rule.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

               CONSUMER FINANCIAL PROTECTION ACT OF 2010


TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION

           *       *       *       *       *       *       *


Subtitle B--General Powers of the Bureau

           *       *       *       *       *       *       *


SEC. 1022. RULEMAKING AUTHORITY.

  (a) In General.--The Bureau is authorized to exercise its 
authorities under Federal consumer financial law to administer, 
enforce, and otherwise implement the provisions of Federal 
consumer financial law.
  (b) Rulemaking, Orders, and Guidance.--
          (1) General authority.--The Director may prescribe 
        rules and issue orders and guidance, as may be 
        necessary or appropriate to enable the Bureau to 
        administer and carry out the purposes and objectives of 
        the Federal consumer financial laws, and to prevent 
        evasions thereof.
          (2) Standards for rulemaking.--In prescribing a rule 
        under the Federal consumer financial laws--
                  (A) the Bureau shall consider--
                          (i) the potential benefits and costs 
                        to consumers and covered persons, 
                        including the potential reduction of 
                        access by consumers to consumer 
                        financial products or services 
                        resulting from such rule; and
                          (ii) the impact of proposed rules on 
                        covered persons, as described in 
                        section 1026, and the impact on 
                        consumers in rural areas;
                  (B) the Bureau shall consult with the 
                appropriate prudential regulators or other 
                Federal agencies prior to proposing a rule and 
                during the comment process regarding 
                consistency with prudential, market, or 
                systemic objectives administered by such 
                agencies; and
                  (C) if, during the consultation process 
                described in subparagraph (B), a prudential 
                regulator provides the Bureau with a written 
                objection to the proposed rule of the Bureau or 
                a portion thereof, the Bureau shall include in 
                the adopting release a description of the 
                objection and the basis for the Bureau 
                decision, if any, regarding such objection, 
                except that nothing in this clause shall be 
                construed as altering or limiting the 
                procedures under section 1023 that may apply to 
                any rule prescribed by the Bureau.
          (3) Exemptions.--
                  (A) In general.--The Bureau, by rule, may 
                conditionally or unconditionally exempt any 
                class of covered persons, service providers, or 
                consumer financial products or services, from 
                any provision of this title, or from any rule 
                issued under this title, as the Bureau 
                determines necessary or appropriate to carry 
                out the purposes and objectives of this title, 
                taking into consideration the factors in 
                subparagraph (B).
                  (B) Factors.--In issuing an exemption, as 
                permitted under subparagraph (A), the Bureau 
                shall, as appropriate, take into 
                consideration--
                          (i) the total assets of the class of 
                        covered persons;
                          (ii) the volume of transactions 
                        involving consumer financial products 
                        or services in which the class of 
                        covered persons engages; and
                          (iii) existing provisions of law 
                        which are applicable to the consumer 
                        financial product or service and the 
                        extent to which such provisions provide 
                        consumers with adequate protections.
          (4) Exclusive rulemaking authority.--
                  (A) In general.--Notwithstanding any other 
                provisions of Federal law and except as 
                provided in section 1061(b)(5), to the extent 
                that a provision of Federal consumer financial 
                law authorizes the Bureau and another Federal 
                agency to issue regulations under that 
                provision of law for purposes of assuring 
                compliance with Federal consumer financial law 
                and any regulations thereunder, the Bureau 
                shall have the exclusive authority to prescribe 
                rules subject to those provisions of law.
                  (B) Deference.--Notwithstanding any power 
                granted to any Federal agency or to the Council 
                under this title, and subject to section 
                1061(b)(5)(E), the deference that a court 
                affords to the Bureau with respect to a 
                determination by the Bureau regarding the 
                meaning or interpretation of any provision of a 
                Federal consumer financial law shall be applied 
                as if the Bureau were the only agency 
                authorized to apply, enforce, interpret, or 
                administer the provisions of such Federal 
                consumer financial law.
          (5) Procedures for bureau guidance.--
                  (A) Definitions.--In this paragraph--
                          (i) the term ``Bureau'' means--
                                  (I) the Director of the 
                                Bureau;
                                  (II) the Deputy Director of 
                                the Bureau; and
                                  (III) any employee of the 
                                Bureau described in section 
                                1013(a)(1)(B); and
                          (ii) the term ``guidance''--
                                  (I) means--
                                          (aa) an agency 
                                        statement of general 
                                        applicability and 
                                        future effect, other 
                                        than a regulatory 
                                        action, that sets forth 
                                        a policy on a 
                                        statutory, regulatory, 
                                        or technical issue or 
                                        an interpretation of a 
                                        statutory or regulatory 
                                        issue; and
                                          (bb) any written 
                                        interpretive rule, 
                                        bulletin, statement of 
                                        policy, letter, 
                                        examination manual, 
                                        frequently asked 
                                        question, notice, 
                                        directive, news 
                                        release, blog post, 
                                        small entity compliance 
                                        guide, or other 
                                        authoritative document 
                                        issued by the Bureau 
                                        regarding compliance 
                                        with a Federal consumer 
                                        financial law; and
                                  (II) does not include--
                                          (aa) a purely 
                                        internal Bureau policy;
                                          (bb) a law 
                                        enforcement 
                                        communication such as a 
                                        complaint, consent 
                                        order, judgment, legal 
                                        opinion, warning 
                                        letter, investigatory 
                                        letter, notice of 
                                        hearing, civil 
                                        investigative demand, 
                                        subpoena, no-action 
                                        letter, advisory 
                                        opinion, or any request 
                                        in lieu of the 
                                        foregoing;
                                          (cc) an 
                                        individualized 
                                        supervisory 
                                        communication such as a 
                                        supervisory letter, 
                                        report of examination, 
                                        memorandum of 
                                        understanding, board 
                                        resolution, matter 
                                        requiring attention, or 
                                        individualized 
                                        communication or 
                                        agreement pursuant to 
                                        the supervisory 
                                        authority of the 
                                        Bureau; or
                                          (dd) a decision 
                                        issued under subtitle 
                                        E.
                  (B) Guidance requirements.--The Director 
                shall issue guidance that is necessary or 
                appropriate to enable the Bureau to carry out 
                Federal consumer financial law, including 
                facilitating compliance with such law.
                  (C) Rulemaking.--
                          (i) Proposed rule.--Not later than 18 
                        months after the date of enactment of 
                        this paragraph, the Bureau shall 
                        publish in the Federal Register and on 
                        the website of the Bureau a proposed 
                        rule defining--
                                  (I) each type of guidance the 
                                Bureau shall provide;
                                  (II) the criteria the Bureau 
                                shall use for selecting each 
                                type of guidance;
                                  (III) the process and 
                                timelines for requests for 
                                guidance;
                                  (IV) the time periods for the 
                                response of the Bureau to a 
                                request for each type of 
                                guidance; and
                                  (V) a process for amending or 
                                revoking guidance issued under 
                                the rule, including a process 
                                for public input on any 
                                proposal to amend or revoke 
                                guidance, unless the Bureau 
                                determines public input is not 
                                required due to public 
                                exigency.
                          (ii) Final rule.--Not later than 1 
                        year after the date on which the 
                        proposed rule described in clause (i) 
                        is published, the Bureau shall publish 
                        a final rule based on the proposed 
                        rule.
                  (D) Reliance on bureau guidance.--No person 
                shall be held liable for any act done or 
                omitted in good faith in conformity with any 
                applicable guidance from the Bureau or any 
                predecessor agency that was in effect at the 
                time of the act or omission, even if the 
                guidance is later revoked, amended, or rendered 
                inconsistent by guidance or action by the 
                Bureau or a determination by a court of 
                competent jurisdiction.
                  (E) Development of a penalty matrix.--
                          (i) Proposed rule.--Not later than 18 
                        months after the date of the enactment 
                        of this subparagraph, the Bureau shall 
                        publish in the Federal Register and on 
                        the website of the Bureau a proposed 
                        rule establishing guidelines for 
                        determining the size of any civil 
                        monetary penalties issued by the Bureau 
                        based on the severity of the actionable 
                        conduct in violation of a Federal 
                        consumer financial law and the level of 
                        culpability. The regulations prescribed 
                        under this paragraph shall, to the 
                        extent possible, align with any chart, 
                        matrix, rule, or guideline published by 
                        the Office of the Comptroller of the 
                        Currency, the Corporation, or the Board 
                        of Governors.
                          (ii) Final rule.--Not later than 1 
                        year after the date on which the 
                        proposed rule described in clause (i) 
                        is published, the Bureau shall publish 
                        a final rule based on the proposed 
                        rule.
  (c) Monitoring.--
          (1) In general.--In order to support its rulemaking 
        and other functions, the Bureau shall monitor for risks 
        to consumers in the offering or provision of consumer 
        financial products or services, including developments 
        in markets for such products or services.
          (2) Considerations.--In allocating its resources to 
        perform the monitoring required by this section, the 
        Bureau may consider, among other factors--
                  (A) likely risks and costs to consumers 
                associated with buying or using a type of 
                consumer financial product or service;
                  (B) understanding by consumers of the risks 
                of a type of consumer financial product or 
                service;
                  (C) the legal protections applicable to the 
                offering or provision of a consumer financial 
                product or service, including the extent to 
                which the law is likely to adequately protect 
                consumers;
                  (D) rates of growth in the offering or 
                provision of a consumer financial product or 
                service;
                  (E) the extent, if any, to which the risks of 
                a consumer financial product or service may 
                disproportionately affect traditionally 
                underserved consumers; or
                  (F) the types, number, and other pertinent 
                characteristics of covered persons that offer 
                or provide the consumer financial product or 
                service.
          (3) Significant findings.--
                  (A) In general.--The Bureau shall publish not 
                fewer than 1 report of significant findings of 
                its monitoring required by this subsection in 
                each calendar year, beginning with the first 
                calendar year that begins at least 1 year after 
                the designated transfer date.
                  (B) Confidential information.--The Bureau may 
                make public such information obtained by the 
                Bureau under this section as is in the public 
                interest, through aggregated reports or other 
                appropriate formats designed to protect 
                confidential information in accordance with 
                paragraphs (4), (6), (8), and (9).
          (4) Collection of information.--
                  (A) In general.--In conducting any monitoring 
                or assessment required by this section, the 
                Bureau shall have the authority to gather 
                information from time to time regarding the 
                organization, business conduct, markets, and 
                activities of covered persons and service 
                providers.
                  (B) Methodology.--In order to gather 
                information described in subparagraph (A), the 
                Bureau may--
                          (i) gather and compile information 
                        from a variety of sources, including 
                        examination reports concerning covered 
                        persons or service providers, consumer 
                        complaints, voluntary surveys and 
                        voluntary interviews of consumers, 
                        surveys and interviews with covered 
                        persons and service providers, and 
                        review of available databases; and
                          (ii) require covered persons and 
                        service providers participating in 
                        consumer financial services markets to 
                        file with the Bureau, under oath or 
                        otherwise, in such form and within such 
                        reasonable period of time as the Bureau 
                        may prescribe by rule or order, annual 
                        or special reports, or answers in 
                        writing to specific questions, 
                        furnishing information described in 
                        paragraph (4), as necessary for the 
                        Bureau to fulfill the monitoring, 
                        assessment, and reporting 
                        responsibilities imposed by Congress.
                  (C) Limitation.--The Bureau may not use its 
                authorities under this paragraph to obtain 
                records from covered persons and service 
                providers participating in consumer financial 
                services markets for purposes of gathering or 
                analyzing the personally identifiable financial 
                information of consumers.
          (5) Limited information gathering.--In order to 
        assess whether a nondepository is a covered person, as 
        defined in section 1002, the Bureau may require such 
        nondepository to file with the Bureau, under oath or 
        otherwise, in such form and within such reasonable 
        period of time as the Bureau may prescribe by rule or 
        order, annual or special reports, or answers in writing 
        to specific questions.
          (6) Confidentiality rules.--
                  (A) Rulemaking.--The Bureau shall prescribe 
                rules regarding the confidential treatment of 
                information obtained from persons in connection 
                with the exercise of its authorities under 
                Federal consumer financial law.
                  (B) Access by the bureau to reports of other 
                regulators.--
                          (i) Examination and financial 
                        condition reports.--Upon providing 
                        reasonable assurances of 
                        confidentiality, the Bureau shall have 
                        access to any report of examination or 
                        financial condition made by a 
                        prudential regulator or other Federal 
                        agency having jurisdiction over a 
                        covered person or service provider, and 
                        to all revisions made to any such 
                        report.
                          (ii) Provision of other reports to 
                        the bureau.--In addition to the reports 
                        described in clause (i), a prudential 
                        regulator or other Federal agency 
                        having jurisdiction over a covered 
                        person or service provider may, in its 
                        discretion, furnish to the Bureau any 
                        other report or other confidential 
                        supervisory information concerning any 
                        insured depository institution, credit 
                        union, or other entity examined by such 
                        agency under authority of any provision 
                        of Federal law.
                  (C) Access by other regulators to reports of 
                the bureau.--
                          (i) Examination reports.--Upon 
                        providing reasonable assurances of 
                        confidentiality, a prudential 
                        regulator, a State regulator, or any 
                        other Federal agency having 
                        jurisdiction over a covered person or 
                        service provider shall have access to 
                        any report of examination made by the 
                        Bureau with respect to such person, and 
                        to all revisions made to any such 
                        report.
                          (ii) Provision of other reports to 
                        other regulators.--In addition to the 
                        reports described in clause (i), the 
                        Bureau may, in its discretion, furnish 
                        to a prudential regulator or other 
                        agency having jurisdiction over a 
                        covered person or service provider any 
                        other report or other confidential 
                        supervisory information concerning such 
                        person examined by the Bureau under the 
                        authority of any other provision of 
                        Federal law.
          (7) Registration.--
                  (A) In general.--The Bureau may prescribe 
                rules regarding registration requirements 
                applicable to a covered person, other than an 
                insured depository institution, insured credit 
                union, or related person.
                  (B) Registration information.--Subject to 
                rules prescribed by the Bureau, the Bureau may 
                publicly disclose registration information to 
                facilitate the ability of consumers to identify 
                covered persons that are registered with the 
                Bureau.
                  (C) Consultation with state agencies.--In 
                developing and implementing registration 
                requirements under this paragraph, the Bureau 
                shall consult with State agencies regarding 
                requirements or systems (including coordinated 
                or combined systems for registration), where 
                appropriate.
          (8) Privacy considerations.--In collecting 
        information from any person, publicly releasing 
        information held by the Bureau, or requiring covered 
        persons to publicly report information, the Bureau 
        shall take steps to ensure that proprietary, personal, 
        or confidential consumer information that is protected 
        from public disclosure under section 552(b) or 552a of 
        title 5, United States Code, or any other provision of 
        law, is not made public under this title.
          (9) Consumer privacy.--
                  (A) In general.--The Bureau may not obtain 
                from a covered person or service provider any 
                personally identifiable financial information 
                about a consumer from the financial records of 
                the covered person or service provider, 
                except--
                          (i) if the financial records are 
                        reasonably described in a request by 
                        the Bureau and the consumer provides 
                        written permission for the disclosure 
                        of such information by the covered 
                        person or service provider to the 
                        Bureau; or
                          (ii) as may be specifically permitted 
                        or required under other applicable 
                        provisions of law and in accordance 
                        with the Right to Financial Privacy Act 
                        of 1978 (12 U.S.C. 3401 et seq.).
                  (B) Treatment of covered person or service 
                provider.--With respect to the application of 
                any provision of the Right to Financial Privacy 
                Act of 1978, to a disclosure by a covered 
                person or service provider subject to this 
                subsection, the covered person or service 
                provider shall be treated as if it were a 
                ``financial institution'', as defined in 
                section 1101 of that Act (12 U.S.C. 3401).
  (d) Assessment of Significant Rules.--
          (1) In general.--The Bureau shall conduct an 
        assessment of each significant rule or order adopted by 
        the Bureau under Federal consumer financial law. The 
        assessment shall address, among other relevant factors, 
        the effectiveness of the rule or order in meeting the 
        purposes and objectives of this title and the specific 
        goals stated by the Bureau. The assessment shall 
        reflect available evidence and any data that the Bureau 
        reasonably may collect.
          (2) Reports.--The Bureau shall publish a report of 
        its assessment under this subsection not later than 5 
        years after the effective date of the subject rule or 
        order.
          (3) Public comment required.--Before publishing a 
        report of its assessment, the Bureau shall invite 
        public comment on recommendations for modifying, 
        expanding, or eliminating the newly adopted significant 
        rule or order.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    H.R. 5534, the ``Give Useful Information to Define 
Effective (``GUIDE'') Compliance Act,'' would direct the 
Consumer Financial Protection Bureau (``Consumer Bureau'') to 
issue a formal rule in the Federal Register establishing a 
scheme for the issuance of guidance materials and activities to 
the general public, including regulated entities. Specifically, 
this rule would have to define: (1) each type of guidance that 
the Consumer Bureau will provide; (2) the criteria for 
selecting each of these types; (3) the time periods by which 
the Consumer Bureau will respond to requests for guidance; and 
(4) the process, including a public notice and comment, by 
which guidance can be revoked or rescinded, unless the Consumer 
Bureau determines that a comment period is not needed due to 
public exigency.
    We support considering ways that all Federal financial 
regulators, including the Consumer Bureau, could strengthen 
their guidance frameworks, and recognize this well-intended aim 
of H.R. 5534. However, H.R. 5534 goes too far.
    The Consumer Bureau issues a wide variety of guidance, 
including interpretative rules, general statements of policy, 
and non-rule guidance. As underscored in the Consumer Bureau's 
Request for Information (``RFI'') regarding its guidance 
implementation and support:\1\
---------------------------------------------------------------------------
    \1\Consumer Financial Protection Bureau, Docket No. CFPB-2018-0013, 
available at: https://files.consumerfinance.gov/f/documents/
cfpb_rfi_guidance-and-implementation_032018.pdf.

        ``The Dodd-Frank Act transferred to the [Consumer] 
        Bureau rulemaking authority that previously had been 
        exercised by seven other Federal agencies. Those 
        agencies used a variety of methods for providing 
        guidance to industry on interpretive questions arising 
        under the statutes and regulations they administered. 
        Such guidance is `widely understood to be an essential 
        instrument of [F]ederal administration' and facilitates 
        compliance with Federal law. In particular, it allows 
        agencies to articulate their positions in a `relatively 
        low cost and flexible' way and facilitates 
        stakeholders' knowledge of agency positions and 
        intentions ahead of enforcement or similar 
        actions.''\2\
---------------------------------------------------------------------------
    \2\Id, at page 3.

    In describing the importance of agencies' flexible use of 
guidance materials in the RFI, the Consumer Bureau cited 
several sources,\3\ including Hoctor v. USDA,\4\ in which the 
Seventh Circuit Court of Appeals noted that ``[i]t would be no 
favor to the public to discourage the announcement of agencies' 
interpretations by burdening the interpretative process with 
cumbersome formalities''. The RFI also pointed to Cmty. 
Nutrition Inst. v. Young,\5\ it which the D.C. Circuit Court of 
Appeals ``[r]ecognize[d] that such guidelines have the not 
inconsiderate benefits of apprising the regulated community of 
the agencies' interpretations as well as informing the exercise 
of discretion by agents and officers in the field.''
---------------------------------------------------------------------------
    \3\For example, see Nicholas R. Parrillo, ``Federal Agency 
Guidance: An Institutional Perspective,'' at 28 (Oct. 12, 2017) (Yale 
L. Sch.), available at: https://www.acus.gov/report/agency-guidance-
final-report; and John F. Manning, ``Nonlegislative Rules,'' 72 Geo. 
Wash. L. Rev. 893, at 914-15 (2004).
    \4\Hoctor v. USDA, 82 F.3d 165, 167 (7th Cir. 1996).
    \5\Cmty. Nutrition Inst. v. Young, 818 F.2d. 943, 949 (D.C. Cir. 
1987).
---------------------------------------------------------------------------
    We are concerned that the bill would mandate a complex and 
burdensome new scheme on the Consumer Bureau that would impose 
unprecedented administrative and operational constraints on the 
agency's capacity to issue guidance. Limiting the agency's use 
of guidance materials would unduly hamstring its ability to be 
nimble and responsive in communicating with the general public 
about how it interprets Federal consumer financial laws and 
force it to create a formal process for its guidance framework. 
We believe that H.R. 5534 would ultimately decrease, not 
promote, the overall effectiveness and accessibility of the 
Consumer Bureau's guidance materials.
    We also are troubled with the broad liability shield 
created in the bill that would prohibit the Consumer Bureau 
from holding people who fail to comply with guidance, that has 
later been altered or rescinded, accountable for their 
misconduct, as long as they can assert that they have relied in 
good-faith on even outdated guidance materials.
    For these reasons, we oppose H.R. 5534.

                                   Maxine Waters.
                                   Carolyn B. Maloney.
                                   Nydia M. Velazquez.
                                   Wm. Lacy Clay.
                                   Michael E. Capuano.
                                   Charlie Crist.

                                  [all]