On June 22, 2020, the Consumer Financial Protection Bureau (“CFPB”) launched its advisory opinion pilot program and its proposed final advisory opinion program. The pilot program is effective immediately, and the CFPB is accepting comments on the final program until August 21, 2020. Dykema is submitting comments on the proposed permanent advisory opinion program on behalf of clients.
Under both the pilot and permanent advisory opinion programs, institutions may request an advisory opinion from the CFPB in order to clarify compliance with regulations and address areas of uncertainty. These advisory opinions will be published in the Federal Register and will be considered binding interpretive rules upon which institutions may rely, offering a safe harbor from regulatory scrutiny.
For the pilot program, the CFPB said it will select requests for advisory opinions based on four priorities: (1) providing consumers with timely and understandable information to make responsible decisions; (2) reducing regulatory burdens; (3) ensuring consistency in enforcement of federal consumer financial laws; and (4) ensuring that markets for consumer financial products operate transparently and efficiently to facilitate access and innovation. The CFPB will also consider whether a request for an advisory opinion contains an issue that has been noted during prior examinations, and thus the issue would benefit from additional clarity, and whether the issue concerns an ambiguity not previously addressed in previous guidance.
The CFPB also listed factors that would indicate an advisory opinion is not appropriate, including that: (1) the interpretive issue is the subject of an ongoing CFPB investigation or enforcement action; (2) the interpretive issue is the subject of an ongoing or planned rulemaking; (3) the issue is better suited for the notice-and-comment process; (4) the issue could be addressed effectively through a Compliance Aid; or (5) there is clear CFPB or court precedent that is already available to the public on the issue. Notably, the CFPB will not accept requests under the pilot program on behalf of regulated institutions from third parties, such as law firms or trade associations.
Requests for advisory opinions under the pilot program may be emailed to [email protected]
The CFPB is also seeking public comment on a proposed advisory opinion program that would ultimately take the place of the pilot. Under the permanent program, third parties would be able to submit requests for advisory opinions on behalf of regulated institutions. The proposed factors the CFPB will consider in deciding whether to issue an advisory opinion under the permanent program are currently the same as those announced for the pilot program, and enumerated above. The permanent program will focus on clarifying ambiguities in the CFPB’s regulations, but may still offer advisory opinions to clarify statutory ambiguities as well.
The CFPB has requested specific comments on the following topics:
- Application elements the CFPB should require from parties requesting advisory opinions, and accommodations that should be made for requestors with limited legal resources;
- How the CFPB should prioritize requests for advisory opinion guidance;
- How the CFPB should quantify benefit to consumers when evaluating advisory opinion requests;
- Improvements that could be made to the proposed permanent advisory opinion program to further enhance compliance;
- How the CFPB should handle sensitive information submitted by requestors; and
- How the CFPB can make advisory opinion 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.
This is a unique opportunity to provide comments on the CFPB’s process and responsiveness to industry concerns regarding interpretation of CFPB regulations. We would encourage institutions to provide comments that might help shape how requests are evaluated and responses delivered.