CFPB Launches Advisory Opinion Pilot Program to Provide Clarity Where There is Regulatory Uncertainty

The Consumer Financial Protection Bureau published a notice in the Federal Register announcing that it is launching a pilot Advisory Opinion (AO) Program. With this program, the CFPB would provide advisory opinions in areas of regulatory uncertainty. The CFPB created the pilot in response to feedback it received through its Request for Information  Regarding Bureau Guidance and Implementation Support—part of the series of RFIs released by the CFPB in early 2018 when Mick Mulvaney temporarily took over the directorship of the agency.

The goal of the pilot program is:

[T]o provide guidance with interpretive content that is: Focused on regulatory uncertainty identified by requestors; reliable for the requestor and all similarly situated parties as the Bureau's authoritative interpretation of the law; and publicly released for the awareness of all affected persons. 

Requests can be submitted via email to advisoryopinion@cfpb.gov with some information to help the CFPB. Most notably, pilot program requests cannot be annonymous—requests submitted must idenitfy the requestor, and the CFPB is not allowing requests from trade associations or law firms on behalf of unnamed entities.

Advisory opinions that are birthed from this process "will be applicable to the requestor and to similarly situationed parties to the extent that their situations conform to the Bureau's summary of material facts in the AO."

To determine whether an AO is appropriate, the CFPB will weigh certain factors, such as:

• The issue in question has been noted during prior CFPB examinations as one that could benefit from regulatory clarity;
• The issue is of substantive importance or impact, or whose clarification would provide significant benefit; 
• The issue relates to ambiguity that has not already been addressed by the CFPB through an interpretive rule or other authoritative sources. 

Issues that factor against the appropriateness of an AO include:

• That the issue is subject to an ongoing investigation or enforcement action;
• That the issue is subject to ongoing rulemaking;
• The issue is better-suited for the notice-and-comment process;
• The issue could be addressed through a compliance aid; 
• there is clear precedent already available to the public on the issue.

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insideARM Perspective

At first blush, this seems like a positive step for the industry, which has been mired in decades of outdated, unclear rules of the road—and the ensuing endless litigation from such deficiencies. However, since debt collection is already the subject of an extensive, ongoing rulemaking process—both with the NPRM (Notice of Proposed Rulemaking), which is due out later this year, and the SNPRM (Supplemental Notice of Proposed Rulemaking) for time-barred debt—it sounds like debt collection questions will be on-hold for the pilot program. Or, at least, questions that are already addressed in the proposed rules. With that said, we don't yet know what the final rules will look like, so the pilot program might come in handy once we have those rules in hand.