CBA Comment Letter re RFI on Bureau Guidance and Implementation Support

Submitted via regulations.gov

Monica Jackson, Office of the Executive Secretary

Bureau of Consumer Financial Protection

1700 G Street NW

 

Re: Request for Information Regarding Bureau Guidance and Implementation Support

 

Dear Ms. Jackson,

            The Consumer Bankers Association (“CBA”) appreciates the opportunity to comment on the Bureau of Consumer Financial Protection’s (“Bureau”) guidance and implementation support. CBA’s members frequently rely on the Bureau’s guidance and implementation support to navigate a complex world of regulations while trying to best serve the financial needs of consumers.

            The Bureau recognized the various challenges presented by issuing “Guidance,” as stated in the Bureau’s Request for Information Regarding Bureau Guidance and Implementation Support (“RFI”). CBA agrees that the guidance process has various tradeoffs, yet emphasizes that often, various forms of interpretive guidance can greatly help financial institutions better comprehend and work within the rules and regulations governed by the Bureau. Still, the world of financial services is constantly evolving, and all financial services stakeholders would benefit from having up-to-date guidance on Bureau rules that adequately reflect changes in financial institutions’ business models and operations. As such, the Bureau should establish methods to review Bureau guidance on a regular basis to determine if updates or changes to the guidance are necessary.

            Establishing procedures for the Bureau to re-examine previously issued guidance will help the Bureau establish guardrails for the financial services industry without the need for new and burdensome rulemaking, while affording financial institutions the opportunity to better tailor their individual programs to both adhere to Bureau rules and serve consumers in the best way possible.

            In addition to establishing a procedure to re-examine the various guidance materials the Bureau publishes on a regular basis, financial institutions, consumers, and other stakeholders would greatly benefit if the following recommendations are implemented.

  1. Improve the Bureau’s Regulatory Inquiries Function

CBA members greatly value the Bureau’s willingness to answer regulatory inquiries via telephone. This process is frequently used by financial institutions with targeted questions concerning the Bureau’s various rules and regulations. However, each call begins with a disclaimer stating that the information provided on the call cannot be relied upon by the institution. This disclaimer effectively limits the usefulness of any response given via the telephone, and as such, should be removed so individuals calling the Bureau can rely on the information given to them on the call.

      The Bureau should commit itself to considering and issuing timely, accurate, and helpful responses to inquiries sent through electronic means. CBA recommends the Bureau acknowledge receipt of inquiries within two days of receipt, and establish and publish a service level agreement for responses.

      Additionally, the Bureau should issue cumulative “Frequently Asked Questions” (“FAQs”) on a monthly basis reflecting the inquiries made by financial institutions, and the responses to those inquiries. As is the case with those inquiries made via telephone, a disclaimer would greatly limit the use of the Bureau responses, and as such, no disclaimer should be attached to the FAQ responses. This will help financial institutions interpret the Bureau’s various regulations. Additionally, the Bureau would benefit because releasing cumulative FAQs will help cut down on duplicative inquiries. A process should also be established to memorialize the cumulative FAQs into more formal guidance documents. Finally, the Bureau should closely monitor the inquiries submitted, and the Bureau’s responses to determine what rules and regulations may need more interpretive guidance.

  1. Enhance Compliance Aids Usefulness

While CBA members utilize the Bureau’s various webinars and implementation aids, these tools are currently of limited value because they merely restate the rule and applicable commentary. The Bureau should include regulatory developments and other information in webinars and implementation aids to provide meaningful context and insight for rules and Bureau activities. Financial institutions could leverage these insights to enhance their respective compliance and regulatory management systems to further compliance with the Bureau’s rules and regulations, and increase protections for consumers.

The Bureau should also frequently revise FAQs, examination manuals, and implementation aids to reflect Bureau regulatory actions, judicial decisions, and regulatory actions by other federal regulators to ensure these materials are of improved use to financial institutions and consumers. Additionally, implementation aids should provide specific examples of means to comply, and should be frequently updated to account for the use of new technology, especially as consumers meet many of their financial needs through mobile channels.

Finally, the Bureau should continue to improve on its efforts to reach out to financial institutions, trade associations, and interested stakeholders on a regular basis to foster an environment of better understanding around regulatory compliance requirements.

  1. Formalize and Standardize Official Interpretations and Standalone Rules

The Bureau should establish a process to formally memorialize Bureau interpretations conveyed in various advisory opinions and other standalone guidance documents in the Bureau’s Official Interpretations. Further, when issuing standalone interpretive rules, the Bureau should establish notice and comment periods for interested stakeholders to provide input to the Bureau. When the Bureau requests feedback from interested stakeholders, the Bureau should be sure to review all information received, and incorporate the feedback into any guidance issued, or at least issue comprehensive explanations for why feedback was not incorporated. Finally, the Bureau should establish a procedure for the Bureau’s commentary on rules and regulations to be updated on a regular basis.

  1. Better Utilize Fair Lending Guidance and the Division of Supervision Enforcement

The Bureau’s quarterly supervisory highlights related to fair lending are useful for financial institutions, but these supervisory highlights should not be used to provide regulatory interpretations. Instead, the Bureau should issue periodic regulatory guidance that financial institutions can rely on.

The Bureau’s Office of Fair Lending and Equal Opportunity’s frequent open dialogue with industry stakeholders has proven to be a useful tool, but it has historically been difficult for Bureau staff to provide direct feedback on specific issues to those who inquire. Often, financial institutions cannot discern details from the feedback received from the Office of Fair Lending and Equal Opportunity. As such, if the Office of Fair Lending and Equal Opportunity published regulatory guidance on specific issues on a periodic basis, financial institutions and consumers would greatly benefit from the increased clarity this guidance could bring.