Bureau of Consumer Financial Protection RFI's

 

In January 2018, the Bureau of Consumer Financial Protection announced a call for evidence to ensure it is fulfilling its proper and appropriate functions. The request for information (RFI) process will request public feedback on topics ranging from enforcement, supervisory, rulemaking, market monitoring and educational activities.  To date, the Bureau has issued RFIs on the following topics:

 

 

Civil Investigative Demands

Comments Submitted

The Associations and their members believe a well-functioning Bureau is critical to maintaining a thriving and stable consumer finance marketplace.  Our concerns lie not with the Bureau’s mission but with the methods the Bureau has used at times to pursue that mission.  We also commend the Bureau for its efforts to solicit industry feedback.

At times the Bureau has wielded its investigative powers without first considering alternative and more tailored approaches, and without sufficient regard for the impact on regulated entities, the long-term impact on consumer financial marketplace, or the opportunity costs of the use of enforcement resources.

Although the Bureaus rules are similar to those of other federal enforcement agencies, the practices are generally much more rigid, less efficient, and more burdensome than those of other agencies.  CID’s are often overbroad, issued after insufficient coordination with non-Bureau enforcement partners, and handled without regard to balancing burdens on the recipient the needs of the Bureau.

At times, the CIDs have also been emblematic of the jurisdictional overreaching that has resulted in “regulation by enforcement.”

The comment letter sets forth specific recommendations to address a number of these concerns. 

 

Administrative Adjudications

Comments Submitted

The Associations stressed the importance of expeditious resolution, and urged the Bureau to look to the Federal Rules of Civil Procedure (“FRCP”) and the Federal Rules of Evidence (“FRE”) as benchmarks for specific timelines, breadth of relevant discovery, and other procedural standards.  We believe that alignment between the Bureau’s rules on administrative adjudications with the FRCP and FRE would allow respondents to have more clarity regarding the manner in which these proceedings are organized, as most respondents have familiarity with these two standards, and also would provide respondents with more of an ability to appropriately respond to potential charges.

Specifically, the Associations also urged the Bureau to amend the Rules to provide respondents with more time to prepare a response to a notice of charges.  Provide respondents with sufficient time to adequately investigate and prepare a well-informed submission, amend the “affirmative disclosure” process for discovery, withdraw its policy of disfavoring the granting of requests for extensions to file responses, produce documents in electronic form to respondents in the first instance and at the Bureau’s expense, and amend the rules to provide respondents with more expansive discovery.

 

Enforcement Process

Comments Submitted

The Financial Services Roundtable, and the Consumer Mortgage Coalition submitted comments to the Bureau of Consumer Financial Protection’s request for information on the effectiveness and efficiency of the Bureau’s enforcement of federal consumer financial laws.

The Associations stressed the importance of the Bureau’s ability to provide vigilant oversight across the consumer financial landscape, especially where institutions might not otherwise be subject to federal oversight, and that the Bureau can use its enforcement powers to facilitate a thriving and stable consumer financial market.  The letter specifically addressed lack of enforcement coordination with other agencies, unclear use of responsible conduct, the past use of press releases to paint a picture of guilt, regulation by enforcement, and the length of investigations.

“CBA members support financial regulators’ duty to fully enforcement the rules and regulations on the book,” CBA General Counsel and Executive Vice President Steve Zeisel said. “With that comes the responsibility to ensure enforcement actions or done, when appropriate, in coordination with other agencies, are clearly defined, and conducted within an appropriate timeframe. It is also vital for the Bureau to stop the practice of using enforcement actions to circumvent the rule writing process and issuing press releases to create an illusion of guilt before a conclusion has been reached.”

 

Supervision Processes

Comments due May 21, 2018

CBA’s comments will address the reevaluate the fundamental philosophy that drives the Bureau’s current approach to supervision.  Specifically, that the Bureau should not consider itself an opponent of regulated entities, that the Bureau should focus on genuine consumer harm and deterrence of bad actors, and that the Bureau should adopt a philosophy of transparency and clarity.

 

External Engagements

Comments due May 29, 2018

CBA’s comments will arguments  that informed, transparent governing is the best way to produce informed policy that is feasible for intuitions and good for consumers.

 

Consumer Complaint Reporting

Comments due June 4, 2018

CBA comments will address our membership’s dedicated approach to complaint resolution and customer satisfaction.  Our comments will focus on three key points: the Dodd-Frank Act does not require or contemplate the complaint database be, the Database creates consumer harm and privacy concerns, and the Database does not enhance consumers’ ability to compare

 

Rulemaking Processes

Comments due June 7, 2018

CBA comments will make recommendations on how to promote a rulemaking process that is standardized, transparent, and receptive to public review and input. Our comments will focus on, among other things, needed improvements to the Bureau’s approach to information gathering, cost/benefit analysis, comment process, and final rule implementation and support.

 

Adopted Regulations & New Rulemaking Authorities

Comments due June 19, 2018

CBA comments will focus on recommendations for changes that will promote consumer access to credit, encourage the use of digital channels, and improve regulatory compliance.

 

Inherited Regulations & Inherited Rulemaking Authorities

Comments due June 25, 2018

CBA comments will focus on ensuring the Bureau takes appropriate steps to update their rules to reflect changes in technology and the ways consumers do their banking. In addition to this over-arching theme CBA will be commenting on those rules ripe for reform and re-examination, including the FCRA, EFTA, and ECOA. Ensuring these rules, and other forms of Bureau guidance are consistently updated to reflect the ever-changing needs of the consumer is a key priority.

 

Guidance & Implementation Support

Comments due July 2, 2018

CBA comments will aim to ensure that the guidance process is transparent to all interested parties, and does not inappropriately circumvent the rulemaking process.

 

Consumer Financial Education

Comments due July 9, 2018

   
Consumer Complaint & Consumer Inquiry Handling Process Comments due July 16, 2018