The Consumer Financial Protection Bureau ("CFPB") announced in March 2020 that it would develop a new advisory opinion program under which it would publish in the Federal Register responses to questions seeking clarification of ambiguities in federal consumer financial law. On November 30, 2020, the CFPB issued a final Advisory Opinion Policy ("AO Policy") setting forth specific procedures for its Advisory Opinion Program.
Opinions issued under the AO Policy will be interpretive rules under the Administrative Procedure Act that respond to a specific need for clarity on a statutory or regulatory interpretive question. See 5 U.S.C. § 553(b). Each advisory opinion will include a summary of the material facts or covered products, and the CFPB's legal analysis of the issue. The CFPB expects that its advisory opinions will apply not only to the requestor, but also "to similarly situated parties to the extent that their situations conform to the summary of material facts or coverage in the advisory opinion."
Under the final AO Policy, any person or entity can request an advisory opinion. The CFPB will consider various factors in determining whether to issue an advisory opinion, including:
- whether the interpretive issue has been noted during prior Bureau exams as one that might benefit from additional clarity (meaning that a survey of the CFPB's Supervisory Highlights publications may be useful for those considering a request for an opinion),
- whether the issue is one of "significant importance" or one whose clarification would provide "significant benefit,"
- whether interpretation of the issue aligns with the CFPB's statutory objectives,
- the impact on the actions of other regulators, and
- the impact on available CFPB resources.
The CFPB signaled that it will generally not issue advisory opinions on interpretive issues subject to ongoing investigations, enforcement actions, or planned rulemaking.
In the release accompanying the AO Policy, the CFPB carefully distinguished advisory opinions from certain other forms of agency guidance, such as CFPB "Compliance Aids" and the individualized "implementation support" that the agency provides to regulated entities through its Regulatory Inquiries Program ("RIF"). Those forms of guidance differ from the interpretive rules that will flow from the AO Policy, the agency observed, in that "neither Compliance Aids nor the RIF are intended to interpret ambiguities in legal requirements." That is true, but the agency does already offer legal interpretations to a degree via its No-Action Letters Policy and its Compliance Assistance Sandbox Policy.
Innovators and other regulated actors seeking legal clarity will need to carefully consider each of these potential avenues when seeking interpretive guidance. Some of the key differences among those avenues may only become clear as the agency invokes the policies in practice. In that regard, we also note that the CFPB will be under new leadership in the near future because of the Presidential election, leaving future implementation of the policies open to some question.
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