Bureau of Consumer Financial Protection.
The Bureau of Consumer Financial Protection (Bureau) is issuing its final Advisory Opinions Policy (Advisory Opinions Policy), which sets forth procedures to facilitate the submission by interested parties of requests that the Bureau issue advisory opinions, in the form of interpretive rules, to resolve regulatory uncertainty, and the manner in which the Bureau will evaluate and respond to such requests.
The Advisory Opinions Policy was applicable beginning November 30, 2020.
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FOR FURTHER INFORMATION CONTACT:
For additional information about the Advisory Opinions Policy contact Jaydee DiGiovanni and Shelley Thompson, Counsels; and Adetola Adenuga, Regulatory Implementation and Guidance Specialist, at 202-435-7158. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@cfpb.gov.
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On June 22, 2020, the Bureau published and sought public comment on a proposal (Advisory Opinions Proposal) for a new Bureau policy on advisory opinions and simultaneously launched a pilot advisory opinion program (Pilot Advisory Opinions program).
This notice finalizes the Advisory Opinions Proposal as the Advisory Opinions Policy (Advisory Opinions Policy). Part I provides some background on the Bureau's guidance functions and related statutory authorities. Part II sets out the final text of the Advisory Opinions Policy. Part III reviews the comments received on the Advisory Opinions Proposal and describes the changes the Bureau has made in the final Advisory Opinions Policy. Parts IV through VI address additional regulatory matters.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Bureau's “primary functions” include issuing guidance implementing Federal consumer financial law. Providing clear and useful guidance to regulated entities is an important aspect of facilitating markets that serve consumers.
The Bureau currently issues several types of guidance regarding the statutes that it administers, as well as implementing regulations and Official Interpretations. For example, the Bureau issues “Compliance Aids” that present legal requirements in a manner that is useful for compliance professionals, other industry stakeholders, and the public, or that include practical suggestions for how entities might choose to comply with those requirements.
The Bureau also provides individualized “implementation support” to regulated entities through its Regulatory Inquiries Function (RIF).
Neither Compliance Aids nor the RIF are intended to interpret ambiguities in legal requirements. The Bureau also may issue interpretive rules, which provide guidance on the Bureau's regulations or governing statutes, and which in some situations may provide a safe harbor to regulated entities that are in compliance with the Bureau's interpretive rule.
The Bureau initiated its policy for issuing advisory opinions in response to feedback received from external stakeholders in the 2018 Guidance RFI, encouraging the Bureau to provide written guidance in cases of regulatory uncertainty. The final Advisory Opinions Policy supersedes the pilot Advisory Opinions Program.
Similar to the advisory opinion programs of many other federal agencies, the Advisory Opinions Policy is intended to facilitate timely guidance by the Bureau that enables compliance by resolving outstanding regulatory uncertainty. The Advisory Opinions Policy supports 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. Final Text of the Advisory Opinions Policy
The primary purpose of this Advisory Opinions Policy is to establish procedures to facilitate the submission by interested parties of requests that the Bureau issue advisory opinions and the manner in which the Bureau will evaluate and respond to such requests. Advisory opinions will be interpretive rules issued to resolve regulatory uncertainty.
B. Submission and Content of Requests
Requests for advisory opinions should be submitted via email to email@example.com or through other means designated by the Bureau. The Bureau will not consider a request for an advisory opinion to be complete unless the request includes all of the information specified in the following paragraphs.
1. Confidential information: The request must identify information the requestor believes should be treated as confidential. If the requestor would not normally make the information public, the Bureau intends to withhold that information from public disclosure to the extent permitted by the Freedom of Information Act, 5 U.S.C. 552(b), and treat the information as confidential in accordance with the Bureau's regulations on Disclosure of Records Start Printed Page 77988and Information.
Requests should not include sensitive personal information, such as account numbers or Social Security numbers, or names of individuals.
2. Identity of person or entity seeking the advisory opinion. The request must identify the person or entity seeking the advisory opinion, as well as the identity of any person or entity submitting the request on behalf of a third party (i.e., one or more clients or members). Outside counsel, a trade association, or a consumer advocacy group, for example, may submit requests for advisory opinions on behalf of one or more clients or members, and those entities do not need to be identified.
3. Statement about the absence of investigation or litigation. The request must include a statement that the issue on which the advisory opinion is being requested is—or is not—the subject of any known or reasonably knowable active litigation or Federal or State agency investigation. Additionally, if the requestor is submitting a request on behalf of an unidentified third party, the requestor must provide a statement that the unidentified third party is—or is not—the subject of an ongoing public Bureau enforcement action or an ongoing Bureau enforcement investigation.
4. Specifics about the issue on which the advisory opinion is sought. The issue raised in the request must be within the Bureau's purview,
and the request must concern actual facts or a course of action that the requestor (or third party) is engaged in, or considering engaging in. The request must set forth as completely as possible, all material facts and circumstances, including detailed specification of the legal question(s) and supporting facts with respect to which the requestor seeks an advisory opinion. The request must also identify the regulatory or statutory provision at issue and the potential uncertainty or ambiguity that the proposed interpretation would address, provide a proposed interpretation of law or regulation, and explain why the proposed interpretation is an appropriate resolution of that uncertainty or ambiguity.
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.
Alternatively, in some cases the Bureau may decide to issue an advisory opinion based on questions the Bureau receives from the public, through other channels, that are not requests for advisory opinions.
C. Characteristics of Advisory Opinions
Advisory Opinions issued by the Bureau under the Advisory Opinions Policy will be interpretive rules under the Administrative Procedure Act (APA) 
that respond to a specific need for clarity on a statutory or regulatory interpretive question. The Bureau will publish advisory opinions in the Federal Register and on consumerfinance.gov, including a summary of the material facts or covered products and the Bureau's legal analysis of the issue.
Unless otherwise stated, each advisory opinion will be applicable to the requestor and to similarly situated parties to the extent that their situations conform to the summary of material facts or coverage in the advisory opinion. The scope and terms of an advisory opinion will be set out in the advisory opinion itself, and may deviate from the interpretation proposed by the requestor in its submission.
Moreover, the Bureau will not normally investigate the underlying facts of the requestor's situation and, as a result, an advisory opinion may not be applicable to the requestor if the underlying facts of the requestor's situation do not conform to the summary of material facts.
If a statutory safe harbor is applicable to an advisory opinion, the advisory opinion 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.
The Fair Debt Collection Practices Act (FDCPA) contains similar protections, specifically using the term “advisory opinion.” 
D. Factors in Bureau Selection of Topics for Advisory Opinions
The Bureau intends to consider the following factors as part of its consideration of whether to address requests for advisory opinions.
The Bureau will prioritize open questions if they are within the Bureau's purview that can legally be addressed through an interpretive rule and if an advisory opinion is an appropriate tool relative to other Bureau tools for answering the question. Initial factors weighing for the appropriateness of an advisory opinion include: (1) The interpretive issue has been noted during prior Bureau examinations as one that might benefit from additional regulatory clarity; (2) the issue is one of significant importance or one whose clarification would provide significant benefit; and/or (3) 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 advisory opinion is not an appropriate tool include: (1) The interpretive issue is the subject of an ongoing Bureau investigation or enforcement action; (2) the interpretive issue is the subject of an ongoing or planned rulemaking; (3) the issue is better suited for notice-and-comment rulemaking; (4) the issue could be addressed more effectively through a Compliance Aid or the RIF function; or (5) there is clear existing Bureau or court precedent that is available to the public on the issue.
The Bureau intends to further evaluate requests for advisory opinions Start Printed Page 77989based on secondary 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 Bureau will primarily focus on the following statutory objectives: (1) Consumers are provided with timely and understandable information to make responsible decisions about financial transactions; (2) outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens; (3) 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) markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.
The Bureau will focus primarily on clarifying ambiguities in its regulations, although Advisory Opinions may clarify statutory ambiguities. The Bureau will not issue advisory opinions on issues that require, or are better addressed through, a legislative rulemaking under the APA.
For example, the Bureau does not intend to issue an advisory opinion that would change regulation text or commentary. Similarly, if 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 that analysis with a bright-line standard that eliminates all of the required analysis. Highly fact-intensive applications of general standards, such as 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.
E. Public Input
Advisory opinions will be issued and final upon publication in the Federal Register. However, interested persons may provide input on published advisory opinions at any time by sending an email to firstname.lastname@example.org or through other means designated by the Bureau. The Bureau is particularly interested in input that addresses whether an advisory opinion would benefit from clarification or reconsideration, with information about the factual or legal basis for clarification or reconsideration.
III. Discussion of Comments and Changes in the Final Advisory Opinions Policy
The Bureau solicited comments on the Advisory Opinions Proposal. The Bureau received 16 unique comments, 13 of which were submitted by industry trade associations. A consortium of 7 consumer advocacy groups submitted a joint comment letter. The remaining comments were provided by staff of the Administrative Conference of the United States (ACUS) and one anonymous submitter. The Bureau has made certain changes to the Advisory Opinions Policy based on the comments, as discussed below, as well as other changes to the Advisory Opinions Policy for clarity.
B. General Comments
Industry commenters uniformly supported the Advisory Opinions Proposal, as did the anonymous commenter. These commenters generally stated that the issuance by the Bureau of advisory opinions could aid in compliance in situations where there are statutory and regulatory uncertainties. Conversely, the joint comment letter by certain consumer advocacy groups generally opposed the Advisory Opinions Proposal and argued that the Bureau should abandon it. The Bureau has carefully considered this comment letter, but contrary to the group's assertions, and as discussed below the Bureau concludes that issuing interpretive rules in the form of advisory opinions is consistent with the APA or with the Bureau's statutory authorities. The Bureau also does not agree that advisory opinions are not an appropriate use of Bureau resources. Advisory opinions represent a commitment of resources by the Bureau that will help entities better understand their obligations under Federal consumer financial law. If an advisory opinion makes clear the law applies, it will promote compliance with the law that will prevent consumer harm. If an advisory opinion makes clear the law does not apply, it will avoid regulated entities incurring unnecessary compliance costs.
C. Legality of Advisory Opinions Policy
The consumer advocacy group comments stated that issuing interpretive rules in the form of advisory opinions are inconsistent with the APA and with the Bureau's statutory authorities. The Bureau disagrees with this assertion. As proposed, the advisory opinions are interpretive rules under the APA.
Nevertheless, the Bureau revised the phrase in the proposed Advisory Opinions Policy that states that “substantive importance or impact” is one of a list of factors that the Bureau intends to consider in part II.D so that it reads “significant importance.” This change is intended to address the commenter's concern that the phrase might be read to suggest that the Bureau intends to issue advisory opinions that are substantive rules rather than interpretive rules under the APA.
D. Role of Public Input
The Bureau received a number of comments from stakeholders expressing interest in a mechanism for soliciting public input on advisory opinions, either before or after issuance. Some commenters advocated that the Bureau obtain such input from the public before issuing advisory opinions. The Bureau notes that there is nothing in the Advisory Opinions Policy that would prevent the Bureau from soliciting input on a draft advisory opinion before finalizing, if the Bureau believes it would be appropriate for a given advisory opinion. However, the Bureau declines to adopt this as a uniform requirement for advisory opinions. Such a process is not typical of peer financial regulators' advisory opinion policies.
It could unnecessarily delay the process of issuing advisory opinions, and thus inhibit the ability of the Bureau to promptly provide clarity about its own regulations and the statutes that it administers.
However, the Bureau does agree that providing a mechanism for the public to provide feedback after an advisory opinion is issued could be useful. Accordingly, the Bureau has added new part II.E to the Advisory Opinions Policy to provide that any person may comment on an advisory opinion via email to email@example.com or through other means designated by the Start Printed Page 77990Bureau. The Bureau encourages any stakeholders including, but not limited to, industry representatives and consumer advocates, to submit such feedback in an instance where stakeholders believe the Bureau should clarify or reconsider an advisory opinion.
E. Accuracy of Requests
Certain consumer advocacy group commenters expressed concern that the requestor's presentation of the issue might be inaccurate or misleading. However, the Bureau emphasizes that it expects requestors to provide truthful submissions to the Bureau. While it is possible that the submitting party may provide inaccurate or misleading facts, doing so would put at great risk the benefit the requester might obtain from an advisory opinion. The Advisory Opinions Policy specifically explains that “an advisory opinion may not be applicable to the requestor if the underlying facts of the requestor's situation do not conform to the Bureau's summary of material facts” in the advisory opinion. The Bureau concludes that this disincentive is sufficient to address the concern commenters have raised. For the same reason, the Bureau does not believe it is necessary to require requestors to include an affirmation that the information provided is accurate, as some commenters suggested.
F. Follow-Up by Requestors
Some commenters asked the Bureau to provide a mechanism for requestors to modify or rescind pending advisory opinion requests. The Bureau notes that it would be consistent with the Advisory Opinions Policy for a requestor to amend or withdraw a pending request.
If the Bureau informs a requestor that it has not chosen to issue an advisory opinion, some commenters advocated that the Bureau create a specific procedure for the requestor to appeal or request reconsideration of that decision. The Bureau does not believe adding a specific procedure to address that possibility is necessary, because the Advisory Opinions Policy would allow a requestor to renew its request a subsequent time if it wants to bring new facts, law, or other considerations to the Bureau's attention.
G. Third-Party Requests
Part II.B of the Advisory Opinions Proposal stated that the Bureau would accept advisory opinion requests from trade associations, service providers, and other third parties; however, the Advisory Opinions Proposal noted that 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.
This statement was in addition to the general requirement that any requestor provide a statement of whether the issue on which the advisory opinion is being requested is the subject of any known or reasonably knowable active litigation or Federal or State agency investigations. Trade association commenters generally supported the Bureau's proposal to allow third parties to request advisory opinions. These commenters stated that allowing third parties to facilitate requests would increase access to advisory opinions, in particular for smaller entities that might otherwise lack the resources to request an advisory opinion.
Certain consumer advocacy groups opposed the proposal to allow requests on behalf of third parties. These commenters argued that the Bureau would have insufficient details about the underlying facts of the third party's situation. The Bureau agrees that it is possible for requests on behalf of a third party, like any type of request, to include insufficient facts for the Bureau to reach a legal conclusion. However, that would be a potential reason for denying an individual request, not entirely closing off this potential source of requests for advisory opinions.
These commenters also asserted that the Bureau must know the identity of the third party in order to avoid interference with litigation or enforcement-related proceedings. However, the Bureau concludes that the categorical, express representations that the requestor would need to make under the Advisory Opinions Policy are sufficient to alert the Bureau to those proceedings of which the Bureau would not otherwise be aware that are likely to be relevant to a potential advisory opinion and about which further Bureau inquiry may be warranted. The Bureau is finalizing the required statements, with non-substantive wording changes in part II.B of the Advisory Opinions Policy.
H. Rescission of Advisory Opinions
It is, of course, possible that the Bureau may decide it is appropriate to rescind an advisory opinion. One commenter emphasized that, if an advisory opinion is rescinded, no action should be taken against those institutions who acted in good faith in accordance with the advisory opinion. The Bureau notes that several statutes provide protections from liability for acts or omissions done in good faith in conformity with an interpretation by the Bureau, as detailed in the text of the Advisory Opinions Policy. And of course, in addition to any applicable safe harbors, the Bureau would not expect to retroactively impose punishments on persons who conformed their conduct in good faith to an advisory opinion before the advisory opinion was rescinded. Doing so would raise serious concerns under the Due Process Clause, which restricts such retroactive relief.
I. Confidentiality of Material in Advisory Opinion Requests
Part II.B of the Advisory Opinions Proposal explained that 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, to the extent applicable.
Industry commenters were broadly supportive of this approach. However, certain consumer advocacy groups asserted that this statement is in tension with the Freedom of Information Act (FOIA). To be clear, the Bureau will treat information that it receives in accordance with FOIA, including the FOIA exemption at 5 U.S.C. 552(b)(4) that applies to confidential business information. Information that is subject to a FOIA exemption also will be treated as confidential in accordance with the Bureau's rule on Disclosure of Records and Information, 12 CFR part 1070. The confidentiality assurance in the proposed policy reflects the standard for determining applicability of the exemption at 5 U.S.C. 552(b)(4), established by the United States Supreme Court in Food Marketing Institute v. Argus Leader Media dba Argus Leader, 139 S. Ct. 2356 (2019). To make this clearer, the Bureau revises the policy to state explicitly that the information will be treated in accordance with FOIA.Start Printed Page 77991
J. Other Comments on Specific Implementation Issues
The Bureau received comments on a number of other subjects. These include comments on the structure of the Bureau's internal deliberative process for considering advisory opinion requests; timelines for deciding advisory opinion requests; details of how the Bureau should communicate with requestors after the Bureau receives their requests, such as what the Bureau should say in the letters that it sends denying requests; general outreach that commenters recommend that the Bureau conduct with outside bodies or groups; recommendations regarding the types of requests the Bureau should prioritize; and details of how the Bureau should post advisory opinions on its website.
The Bureau appreciates receiving commenters' views on all aspects of the program. However, the Bureau has decided not to expand the scope of the Advisory Opinions Policy, which is intended to establish the general procedures of the program, to cover these specific implementation issue. Instead, the Bureau will consider these comments as it proceeds with implementation of the Advisory Opinions Policy.
IV. Regulatory Requirements
This Advisory Opinions Policy is a rule of agency organization, procedure, or practice, and it is therefore exempt from the notice-and-comment rulemaking requirements of the APA.
For the same reason, it is not subject to the 30-day delayed effective date for substantive rules under the APA.
Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis.
V. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.) requires that Federal agencies may not conduct or sponsor, and notwithstanding any other provision of law, a person is not required to respond to a collection of information unless it displays a currently valid Office of Management and Budget (OMB) control number. The information collection requirements as contained in this final Policy and identified below have been approved by OMB and assigned the OMB control number 3170-0072. OMB's approval will expire on November 30, 2023.
The Bureau's Advisory Opinions Proposal, published June 22, 2020, sought comment on these information collection requirements. While the Bureau received numerous comments on the Advisory Opinions Proposal, which are addressed above, the Bureau received no comments specifically regarding the burden estimates or the utility or appropriateness of these information collections. Additional details on comments received can be found in the Supporting Statement for the related 30-day notice published as required under the PRA.
A complete description of the information collection requirements, including the burden estimate methods, is provided in the information collection request (ICR) that the Bureau submitted to OMB under the requirements of the PRA. The ICR submitted to OMB requesting approval under the PRA for the information collection requirements contained herein is available at OMB's public-facing docket at https://www.reginfo.gov/public/.
VI. Signing Authority
The Director of the Bureau, Kathleen L. Kraninger, having reviewed and approved this document, is delegating the authority to electronically sign this document to Grace Feola, a Bureau Federal Register Liaison, for purposes of publication in the Federal Register.
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Dated: November 30, 2020.
Federal Register Liaison, Bureau of Consumer Financial Protection.
[FR Doc. 2020-26661 Filed 12-2-20; 8:45 am]
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