[Federal Register Volume 87, Number 223 (Monday, November 21, 2022)]
[Rules and Regulations]
[Pages 70703-70707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-25139]



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 Rules and Regulations
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  Federal Register / Vol. 87, No. 223 / Monday, November 21, 2022 / 
Rules and Regulations  

[[Page 70703]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1091

[Docket No. CFPB-2022-0024]


Supervisory Authority Over Certain Nonbank Covered Persons Based 
on Risk Determination; Public Release of Decisions and Orders

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule.

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SUMMARY: The Consumer Financial Protection Bureau (Bureau) has 
procedures for establishing supervisory authority over a nonbank 
covered person based on a risk determination, which the Bureau recently 
amended in April 2022 (Updated Procedural Rule). The Updated Procedural 
Rule added a new process to the procedures, for the Bureau to consider 
making final decisions and orders in these proceedings public, in whole 
or in part. While the Bureau strongly believes in supervisory 
confidentiality, these particular decisions and orders present unique 
circumstances that implicate important public interests in 
transparency. The Updated Procedural Rule did not affect the 
confidentiality of supervisory examinations or other aspects of the 
supervisory process. The Bureau is making specific changes to that rule 
in response to comments, in order to clarify the standard that will 
govern whether a decision or order will be publicly released, as well 
as to give respondents in proceedings additional time to provide input 
on that issue.

DATES: This rule is effective on November 21, 2022.

FOR FURTHER INFORMATION CONTACT: Christopher Shelton, Senior Counsel, 
Legal Division, at 202-435-7700. If you require this document in an 
alternative electronic format, please contact 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Overview

    Among other sources of supervisory authority, the Bureau can 
supervise a nonbank covered person that the Bureau ``has reasonable 
cause to determine, by order, after notice to the covered person and a 
reasonable opportunity for such covered person to respond . . . is 
engaging, or has engaged, in conduct that poses risks to consumers with 
regard to the offering or provision of consumer financial products or 
services.'' \1\ The Bureau issued a procedural rule in 2013 to govern 
these proceedings, which is codified at 12 CFR part 1091.\2\ Under the 
original procedures, the Director's final decision or order in the 
proceeding generally could not be publicly released.
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    \1\ 12 U.S.C. 5514(a)(1)(C). The Bureau must base such 
reasonable-cause determinations on complaints collected by the 
Bureau under 12 U.S.C. 5493(b)(3), or on information collected from 
other sources. Id.
    \2\ 78 FR 40351 (July 3, 2013); see also 85 FR 75194 (Nov. 24, 
2020) (updating certain cross-references to 12 CFR part 1070). The 
2013 procedural rule discussed the background and legal authority 
for 12 CFR part 1091 in more detail.
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    The Updated Procedural Rule that the Bureau issued in April 2022 
amended these procedures, creating a process for the Director to 
consider whether to publicly release a final decision or order.\3\ The 
Updated Procedural Rule was exempt from the notice-and-comment 
requirements of the Administrative Procedure Act (APA), because it was 
a rule of agency organization, procedure, and practice. Consequently, 
it was effective upon publication. However, the Bureau invited the 
public to submit comments.
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    \3\ 87 FR 25397 (Apr. 29, 2022).
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    The Bureau received nineteen comments. Many of the comments raised 
substantive issues regarding the entities that commenters believe the 
Bureau should designate, or how the Bureau should approach the ``risks 
to consumers'' standard. These comments are welcome, but the Bureau is 
not addressing those substantive issues in this procedural rulemaking.
    After considering the comments on the Updated Procedural Rule, the 
Bureau is making two changes. First, as urged by several commenters, 
the Bureau is codifying a standard in the rule to govern the 
determination of whether to publicly release a decision or order. 
Second, at the request of one commenter, the Bureau is extending the 
time period that the rule gives to respondents to file a submission on 
the issue of public release. Part II of this preamble discusses in more 
detail the significant comments that the Bureau received.

II. Discussion

A. General Comments on Public Release of Decisions and Orders

    The preamble to the Updated Procedural Rule explained that a 
central principle of the supervisory process is confidentiality. At the 
same time, final decisions and orders in part 1091 proceedings present 
unique considerations compared to other supervisory activity. There is 
a public interest in transparency when it comes to these potentially 
significant rulings by the Director as head of the agency. Also, if a 
decision or order is publicly released, it would be available as a 
precedent in future proceedings. Accordingly, the Bureau found that 
there should be a procedural mechanism to determine whether all or part 
of a decision or order should be publicly released.
    Several trade associations and a credit union supported this 
approach. One association stated that public release would benefit all 
financial institutions by providing more clear examples of the types of 
acts and practices that pose risks to consumers. Another association 
noted that it was opposed to any erosion of confidentiality in the 
supervisory process itself, but it agreed with the Bureau that public 
release in this unique context could be insightful for both the public 
and other stakeholders. Similarly, a third association supported the 
change but emphasized that examinations should be confidential.
    Other trade associations, a law firm, and an individual opposed any 
public release. One trade association expressed concern that public 
release would harm the Bureau's subsequent supervisory relationship 
with respondents. Several comments argued that public release would 
harm the reputations of companies. Relatedly, some commenters argued 
that the Bureau's risk determinations would be based on incomplete 
information about the respondent's practices, so there may be 
uncertainty about what specific practices the Bureau would find 
unlawful after a full investigation. According to these commenters, 
this

[[Page 70704]]

could create uncertainty in the market and discourage lawful conduct 
and/or products that are beneficial to consumers. One comment also 
argued that the possibility of public release of the final decision 
could discourage the respondent from being candid when responding to a 
notice of reasonable cause issued by the Bureau. Some comments asserted 
that the approach the Updated Procedural Rule takes to respondents in 
risk-designation proceedings is inconsistent with the approach the 
Bureau takes to other supervised entities. Finally, some commenters 
argued that the rule was inconsistent with the approach of other 
financial regulators, although these comments did not cite specific 
examples.
    After considering these comments, the Bureau continues to believe 
that there should be a process to publicly release final decisions and 
orders, in whole or in part, under appropriate circumstances. As the 
preamble to the Updated Procedural Rule explained, the public has an 
interest in understanding these consequential decisions. It can also be 
important for both the Bureau and the respondent in a risk-
determination proceeding to be able to cite publicly available 
precedents from previous proceedings and assess whether or not they are 
analogous. This promotes consistency and predictability.\4\ And the 
Bureau is not persuaded that public release--subject to the Director's 
authority to withhold or redact information when appropriate--would be 
harmful, for the reasons explained below.
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    \4\ One trade association asserted that the relevant decisions 
or orders have no precedential value because they would not be 
binding in a future proceeding, and also that each case is unique. 
The Bureau disagrees that precedents are only relevant when they are 
binding. The Bureau agrees that cases may or may not be analogous to 
one another, and some cases may turn on unique facts, but that can 
be true in any body of precedent.
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    First, public release of decisions and orders should generally 
cause no harm to the supervisory process, and those situations where 
there is a risk of harm can be addressed on a case-specific basis by 
withholding or redacting the relevant details. As background, the D.C. 
Circuit has explained that supervisory examinations are an informal 
process, where ``bank management must be open and forthcoming in 
response to the inquiries of bank examiners, and the examiners must in 
turn be frank in expressing their concerns about the bank.'' \5\ That 
informal give and take requires confidentiality. However, a final 
decision or order by the Bureau's Director, which requires a respondent 
to submit to supervision, is very different in character from the 
collaborative back-and-forth between examiners and company employees 
that is the heart of the supervisory process.
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    \5\ In re Subpoena Served upon the Comptroller of the Currency, 
967 F.2d 630, 634 (D.C. Cir. 1992).
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    Nonetheless, after considering the comments, the Bureau does 
foresee one circumstance where the need for supervisory confidentiality 
could potentially counsel against releasing information. 
Hypothetically, if the Director's decision or order were to include 
information about specific potential violations of law by the 
respondent, or specific potential compliance management deficiencies, 
and if that information were not otherwise publicly available (such as 
in a prior enforcement action by the Bureau or another regulator), that 
could be a situation where the risk of harm to the supervisory process 
potentially outweighs the public interest in transparency. That is 
because publicly revealing this information might signal the specific 
focus of subsequent confidential examinations. Accordingly, redactions 
may be warranted in that circumstance, as discussed further in part 
II.C of this preamble, below.
    At the same time, the Bureau notes that Congress authorized the 
Bureau to make a risk designation when it has ``reasonable cause to 
determine'' that there are ``risks to consumers.'' \6\ Congress did not 
require the Bureau to make findings that a respondent has violated the 
law or has compliance management deficiencies--instead, that is part of 
the purpose of subsequent examinations of the respondent.
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    \6\ 12 U.S.C. 5514(a)(1)(C).
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    The Bureau's risk-designation authority gives the Bureau's 
supervision program the ability to move as quickly as the marketplace. 
For instance, fast-growing companies in nontraditional areas of the 
consumer finance market may be engaged in novel activities that warrant 
supervisory attention because of their risks to consumers. And there 
can also be supervisory gaps in more traditional areas of the market 
that ought to be filled. Through the supervisory process, CFPB 
examiners can work with the company in question to fully understand and 
manage its risks. This preferably would occur before there has been any 
violation of law or consumer harm, rather than after.
    Accordingly, the Bureau does not anticipate that most decisions and 
orders would include the kind of specific information about potential 
violations of law or compliance management deficiencies that warrant 
redactions.
    With respect to commenters' concerns about reputational harm, there 
is no reason to believe that proceedings under part 1091--which provide 
a fair opportunity for the respondent to present its position to the 
agency and which are subject to judicial review--are more likely than 
any other legal proceeding to result in inaccurate findings the release 
of which would unfairly harm the respondent's reputation. In addition, 
to the extent the Bureau redacts nonpublic information about specific 
potential violations of law or specific potential compliance management 
deficiencies, for the supervisory reasons discussed above and in part 
II.C below, any reputational concerns would be attenuated.\7\
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    \7\ Relatedly, a law firm argued that respondents would have to 
expend substantial resources preparing for and addressing the 
reputational impact of public release. The Bureau agrees that 
respondents may choose to incur some public-relations-management and 
other costs to publicly respond to a public decision or order, but 
that is true of any adverse government decision and not an 
appropriate rationale, in itself, for keeping such decisions secret 
from the public.
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    The Bureau emphasizes that the mere fact that the Bureau designates 
a nonbank covered person for supervision is not an allegation of 
wrongdoing. As a comparison, Congress decided that insured depository 
institutions and insured credit unions with more than $10 billion in 
assets would be subject to Bureau supervision, and the Bureau has 
published a list of those institutions on its website, for 
informational purposes, since the transfer of authority to the Bureau 
in 2011.\8\ The fact that those depository institutions and credit 
unions are subject to Bureau supervision does not mean that they are 
engaged in violations of law. Similarly, an order designating a nonbank 
covered person for supervision only means that the Bureau believes that 
supervision is warranted, based on the statutory standard for those 
designations. Like with all institutions that it supervises, the Bureau 
will then use the confidential supervisory process to, among other 
things, assess the nonbank covered person's compliance with Federal 
consumer financial law.
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    \8\ See Institutions Subject to the Bureau's Supervisory 
Authority, https://www.consumerfinance.gov/compliance/supervision-examinations/institutions/.
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    The Bureau is also not persuaded by the comments arguing that 
public release would create uncertainty in the market. These comments 
assume that market participants would misunderstand the nature of the 
Bureau's findings, and so they would be

[[Page 70705]]

better off having no information about the Bureau's views. But the 
comments do not explain why market participants cannot be trusted to 
read the Bureau's decisions for themselves, to assess what significance 
those decisions may or may not have. It seems doubtful that a regulated 
entity would achieve greater certainty by remaining uninformed of its 
regulator's activities, or that the market as a whole functions more 
effectively when it has to guess about the market regulator's 
activities.\9\
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    \9\ On a similar note, a trade-association comment expressed 
concern that public release could inspire private lawsuits against 
respondents. It is true that Congress has chosen to make several of 
the laws that the Bureau administers privately enforceable by 
consumers. Such litigation may be meritorious or non-meritorious. 
There is no reason to believe that the Bureau's considered findings, 
informed by a fair administrative process, will increase the 
proportion of non-meritorious litigation.
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    The Bureau also does not believe that it is necessary, as a general 
matter, for the final order to be confidential in order for the 
initiating official to formulate a notice of reasonable cause under 
part 1091 and for a respondent to effectively respond to that notice. 
It is conceivable that a complete guarantee of confidentiality might 
result in respondents providing some amount of additional information 
in their responses. But a proceeding under part 1091 does not depend to 
the same degree as an examination on complete confidentiality. The 
Bureau believes that the public interest in transparency regarding the 
Director's decision or order will generally outweigh this 
consideration.
    There is also no inconsistency between the approach that the Bureau 
is taking to respondents in risk-designation proceedings compared to 
other supervised entities. As noted above, the Bureau publicly releases 
a list of the insured depository institutions and insured credit unions 
that meet the $10 billion asset threshold to be subject to its 
supervisory authority. The Bureau does not currently publish such a 
list for the categories of nonbank covered persons that fall under its 
supervisory authority by statute or rule. A principal reason is that 
there is no available process to definitely establish whether a nonbank 
covered person engages in business activities that bring the nonbank 
covered person within those categories, other than when the Bureau 
initiates a specific confidential examination. That difficulty does not 
arise when the Bureau's Director has issued a final decision or order 
in a part 1091 proceeding. The Bureau emphasizes that it is committed 
to protecting examination confidentiality for all categories of 
entities that it supervises, in accordance with its confidentiality 
rules.\10\
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    \10\ 12 CFR part 1070. In a related vein, one trade association 
argued that the Bureau's approach to final orders in risk-
designation proceedings is inconsistent with the fact that it treats 
civil investigative demands (CIDs) issued by the Office of 
Enforcement as generally confidential. This objection overlooks the 
fact that when the Director as head of the agency rules on petitions 
to modify or set aside CIDs, the Bureau normally posts the 
Director's orders on its website in the interest of transparency. 12 
CFR 1080.6(g).
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    Finally, there is no inconsistency between the Bureau and other 
financial regulators in this context. Generally, the prudential 
regulators supervise institutions based on their status as banks or 
credit unions, so the role that Congress assigned to the Bureau in 
extending supervision to nonbank covered persons based on their risks 
to consumers is unique. A roughly analogous situation is when the 
Secretary of the Treasury, the Chair of the Federal Reserve Board, the 
Director of the Bureau, and the other members of the Financial 
Stability Oversight Council make a determination that a nonbank 
financial company will become subject to Federal Reserve supervision, 
because that company ``could pose a threat to the financial stability 
of the United States.'' \11\ The Council normally publishes a detailed 
explanation of its reasons. Any member of the public can read those 
reasons on the Council's web page.\12\
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    \11\ 12 U.S.C. 5323(a)(1), (b)(1).
    \12\ Financial Stability Oversight Council, Designations, 
https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/fsoc/designations. Of course, many 
features of the Council's determinations are dissimilar to the 
Bureau's risk determinations because of differences between the 
financial-stability and consumer-protection contexts, so the Bureau 
does not intend to suggest they are analogous in all respects. The 
Bureau further notes that, even if the Bureau's approach were 
different from other agencies (which it is not), the Bureau is free 
to pursue the approach that best achieves its view of its own 
statutory mission.
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    In summary, the Bureau is not persuaded by these commenters' 
arguments that public release of decisions and orders, in appropriate 
circumstances, would be harmful. However, as discussed in part II.C 
below, the Director will consider arguments that there are reasons why 
a particular decision or order should be withheld or redacted.\13\
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    \13\ A trade association argued that a decision highlighting a 
respondent's need to enhance cybersecurity could invite cybercrime. 
This kind of case-specific concern is properly analyzed on a case-
by-case basis, under the standard discussed later in this preamble.
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B. Alternatives to Public Release Proposed by Commenters

    Some commenters who opposed public release advocated for 
alternatives. These included: releasing only the names of supervised 
nonbanks but not the final decisions and orders themselves; relying on 
potential lawsuits seeking judicial review of decisions and orders to 
make information about them publicly available; adding anonymized 
summaries of decisions and orders to the Bureau's Supervisory 
Highlights publication; or including anonymized findings from 
subsequent exams of designated entities in Supervisory Highlights.
    Ultimately, these alternatives would be inadequate to meet the 
goals of the Updated Procedural Rule. Releasing only the names of 
designated entities, or allowing only those proceedings that are 
challenged in court to enter the public domain, would provide the 
public with much less insight into the Bureau's use of its risk-
designation authority and much less in the way of precedents to inform 
future risk-designation proceedings. Similarly, summarizing the 
Director's decisions and orders in an anonymized form in Supervisory 
Highlights would involve removing all potentially identifying 
information, which would likely deprive the public of information and 
context to understand the Director's decision regarding whether the 
individual entity satisfies the statutory standard for risk 
designation.
    The Bureau does agree with commenters that significant findings 
from exams of designated entities, like significant findings from other 
Bureau exams, will be eligible for potential inclusion in Supervisory 
Highlights if that is appropriate under the circumstances and can be 
done while maintaining the entities' anonymity. Anonymity is important 
in that circumstance, because exam findings for an individual entity 
are part of the collaborative back-and-forth of the supervisory process 
and do not represent a final Director decision. The Director's final 
decision and order is different, for the reasons explained above. And 
although using Supervisory Highlights to release public summaries of 
significant exam findings is valuable, doing so would provide no direct 
insight into the Director's original decision to make a risk 
designation, so it is not a substitute for releasing the decision.

[[Page 70706]]

C. Standard for When the Bureau Would Publicly Release a Decision or 
Order

    In the preamble to Updated Procedural Rule, the Bureau noted that 
rule did not codify a standard to govern public release. However, the 
preamble explained that the Bureau generally anticipated applying 
Exemptions 4 and 6 of the Freedom of Information Act to information 
submitted by respondents that is reflected in final decisions and 
orders.\14\ Exemption 4 applies to ``trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential,'' while Exemption 6 applies to ``personnel and medical 
files and similar files the disclosure of which would constitute a 
clearly unwarranted invasion of personal privacy.'' \15\ The Bureau 
stated that it would also consider (in the context of making individual 
determinations regarding public release) whether there are other 
reasons to not publicly release the decision or order, in whole or in 
part.
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    \14\ 5 U.S.C. 552(b)(4), (b)(6).
    \15\ Id.
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    The Bureau specifically invited comments on whether it should amend 
the rule to codify a standard for determinations regarding public 
release. Commenters generally supported doing so, although there was 
disagreement among commenters about the best standard. One trade 
association stated that FOIA Exemptions 4 and 6 could reasonably apply 
to a wide variety of sensitive information and would give respondents 
ample means to limit the contents of a public order. Other commenters 
argued that FOIA Exemptions 4 and 6 are too limited, might not cover 
certain sensitive data, and are uncertain in scope.
    After considering the comments, the Bureau is codifying a standard 
in the rule, which is that the Director will not release information in 
a decision or order to the extent it would be exempt from disclosure 
under FOIA Exemptions 4 and 6 or the Director determines there is other 
good cause. This standard is similar to the approach that the Bureau 
articulated in the preamble to the Updated Procedural Rule and 
requested comment upon. This approach will provide assurance to 
respondents that the Bureau will protect the categories of information 
included in those two FOIA exemptions, while not foreclosing 
respondents from raising, or the Director from invoking, other grounds 
that may arise. The Bureau disagrees with some commenters that the 
scope of Exemptions 4 and 6 is too uncertain, given that these 
exemptions are routinely applied by agencies and courts, or that the 
exemptions are too narrow, given that they are the method Congress has 
chosen to protect commercial interests and personal privacy interests 
in the FOIA context.\16\ However, the standard adopted by the Bureau 
does not foreclose respondents from arguing that information not within 
those exemptions ought to be withheld for ``good cause.''
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    \16\ A law firm argued that the Bureau should add FOIA Exemption 
3 to the list of exemptions, but the Bureau concludes that would 
create confusion. Exemption 3 resolves potential conflicts between 
FOIA disclosure and certain other federal statutes. 5 U.S.C. 
552(b)(3). It contains requirements that may not be appropriate in a 
non-FOIA context. For instance, if a federal statute is ``enacted 
after the date of enactment of the OPEN FOIA Act of 2009,'' such a 
statute can only provide a basis for withholding records from a FOIA 
requester under Exemption 3 if it ``specifically cites to'' 
Exemption 3. 5 U.S.C. 552(b)(3)(B). But placing such a condition on 
applicable statutes is not necessarily appropriate in this non-FOIA 
context. Any statutory requirements are best addressed within the 
category of ``good cause,'' since compliance with an applicable 
statute would necessarily be ``good cause,'' rather than by relying 
on Exemption 3.
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    A potential example of ``good cause'' is the supervisory 
considerations noted in part II.A above. The Bureau generally expects 
to redact information about specific potential violations of law, or 
specific potential compliance management deficiencies, where the 
information is not otherwise publicly available, and where the Bureau 
concludes there is a risk of harm to the supervisory process that 
outweighs the public interest in transparency.

D. Input by Respondents Into the Determination Regarding Public Release

    Section 1091.115(c)(2) of the Updated Procedural Rule provided 
that, within seven business days \17\ of service of the decision or 
order, the respondent had the option of filing a submission on the 
issue of public release, and then the Director would determine whether 
the decision or order would be released on the Bureau's website, in 
whole or in part.\18\
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    \17\ Under the general rule for counting days in part 1091, the 
seven-day interval does not include intermediate Saturdays, Sundays, 
and Federal holidays. 12 CFR 1091.114(a). This preamble uses the 
term ``business days'' for convenience.
    \18\ The preamble to the Updated Procedural Rule also noted two 
other features of how Sec.  1091.115(c)(2) operates. First, the 
Director's authority regarding public release can be delegated to a 
designee of the Director under existing Sec.  1091.101. Second, the 
Updated Procedural Rule did not extend the staff separation-of-
functions requirement in Sec.  1091.109(c), which applies to the 
Director's final decision and order, to the Director's subsequent 
determination regarding public release. Doing so would not be 
required by law, and the routine determination of whether to post 
material on the Bureau's website is not sufficiently significant to 
warrant doing so. The Bureau did not receive comments opposing these 
two features of the rule, and the Bureau is retaining them. Some 
commenters, although not appearing to oppose the latter feature, 
disputed the description of the determination as routine. However, 
it is routine for federal agencies to decide whether to release or 
withhold information regarding regulated entities.
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    A law firm argued that the Bureau should conduct a formal 
adjudicatory process when deciding whether to publicly release a 
decision or order--separate from and in addition to the substantive 
part 1091 proceeding--in which a decisionmaker other than the Director 
would conduct a hearing. The Bureau believes that the process 
established by the rule provides respondents with a full opportunity to 
raise any concerns regarding public release. The process proposed by 
the law firm would be cumbersome and disproportionate, resulting in 
excessive delay, unnecessary costs for the government, and additional 
legal fees for respondents.\19\
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    \19\ The same comment cites examples of other agencies' practice 
that appear to be inconsistent with its argument that a formal 
adjudicatory process with a hearing is necessary. The comment cites, 
with approval, three agencies' processes for deciding whether to 
release business information under FOIA. Under those three agencies' 
FOIA regulations, like the Bureau's FOIA regulations, the agency 
generally provides notice to the submitter of the business 
information and an opportunity for the submitter to file an 
objection to the potential FOIA disclosure, and the regulations do 
not reference any trial-type hearing. 29 CFR 1610.19; 31 CFR 1.5; 45 
CFR 5.42; 12 CFR 1070.20.
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    The law firm argued, in the alternative, that the seven-business-
day interval for respondents to file their submissions regarding public 
release should be extended. The law firm cited some examples where 
other agencies provide companies with ten business days to address 
confidentiality issues in those agencies' programs. While the Bureau 
believes that the burden on a respondent to assess whether the text of 
a single decision or order contains confidential information is likely 
to be limited, it will err on the side of caution by extending the 
interval to ten business days.

E. Discussion of Impacts of the Rule

    The preamble to the Updated Procedural Rule explained that it will 
have limited effects on the public. Nonbank covered persons that are 
respondents may incur incidental costs, if they choose to prepare 
submissions on the issue of public release. The preamble stated that 
the rule itself did not trigger public release of decisions and orders, 
since it simply established a procedure to consider that issue. It 
further noted that, if the Bureau does ultimately decide to release a 
decision or order, that should generally benefit covered persons, 
consumers, and other members of the public by giving them

[[Page 70707]]

a better understanding of the Bureau's decisionmaking. This discussion 
from the Updated Procedural Rule remains applicable to this rule, which 
adds a standard for making the determination on public release and 
extends the interval for respondents to make submissions on that issue.
    One trade association responded to the Bureau's observation that 
the Updated Procedural Rule did not itself trigger public release of 
decisions and orders, arguing that the Bureau was ignoring the 
consequences of the rule. However, the statement with which this trade 
association took issue is accurate: the Updated Procedural Rule did not 
cause public release by itself. The Bureau agrees that the procedures 
in that rule and this rule enable public release, and in both rules the 
Bureau has considered the consequences of such public release.
    Other comments that relate to the impacts of public release of 
decisions and orders are addressed in part II.A above.

F. Interagency Consultation

    In formulating both the Updated Procedural Rule and this rule, the 
Bureau has consulted the prudential regulators and the Federal Trade 
Commission.

III. Regulatory Requirements

    The preamble to the Updated Procedural Rule explained that, as a 
rule of agency organization, procedure, or practice, it was exempt from 
the notice-and-comment rulemaking requirements of the APA.\20\
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    \20\ 5 U.S.C. 553(b).
---------------------------------------------------------------------------

    Because no notice of proposed rulemaking was required, the 
Regulatory Flexibility Act does not require an initial or final 
regulatory flexibility analysis.\21\ Moreover, the Bureau's Director 
certifies that this rule will not have a significant economic impact on 
a substantial number of small entities. Therefore, an analysis is also 
not required for that reason.\22\ As a result of the rule, respondents 
in the relevant proceedings may choose to make submissions on the issue 
of public release. Some of these respondents may be small entities 
under the Regulatory Flexibility Act, but they would represent a very 
small fraction of small entities in consumer financial services 
markets. Accordingly, the number of small entities affected is not 
substantial.
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    \21\ 5 U.S.C. 603, 604.
    \22\ 5 U.S.C. 605(b).
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    The Bureau has also determined that this rule does not impose any 
new or revise any existing recordkeeping, reporting, or disclosure 
requirements on covered entities or members of the public that would be 
collections of information requiring approval by the Office of 
Management and Budget under the Paperwork Reduction Act.\23\
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    \23\ 44 U.S.C. 3501-3521.
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List of Subjects in 12 CFR Part 1091

    Administrative practice and procedure, Consumer protection, Credit, 
Trade practices.

Authority and Issuance

    Accordingly, the rule that amended 12 CFR part 1091, which was 
published at 87 FR 25397 on April 29, 2022, is adopted as final with 
the following changes:

PART 1091--PROCEDURAL RULE TO ESTABLISH SUPERVISORY AUTHORITY OVER 
CERTAIN NONBANK COVERED PERSONS BASED ON RISK DETERMINATION

0
1. The authority citation for part 1091 continues to read as follows:

    Authority:  12 U.S.C. 5512(b)(1), 5514(a)(1)(C), 5514(b)(7).


0
2. In Sec.  1091.115, revise paragraph (c)(2) to read as follows:


Sec.  1091.115  Change of time limits and confidentiality of 
proceedings.

* * * * *
    (c) * * *
    (2) Publication of final decisions and orders by the Director. The 
Director will make a determination regarding whether a decision or 
order under Sec.  1091.103(b)(2), 1091.109(a), or 1091.113(e) will be 
publicly released on the Bureau's website, in whole or in part. The 
respondent may file a submission regarding that issue, within ten days 
after service of the decision or order. The Director will not release 
information in a decision or order to the extent it would be exempt 
from disclosure under 5 U.S.C. 552(b)(4) or (b)(6) or the Director 
determines there is other good cause. The Director may also decide that 
the determination regarding public release will itself be released on 
the website, in whole or in part. Section 1091.109(c) is not applicable 
to determinations under this paragraph.

Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2022-25139 Filed 11-18-22; 8:45 am]
BILLING CODE 4810-AM-P