[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