The suggestion box is officially open at the Consumer Financial Protection Bureau for comments from the public on which provisions of the regulations that the CFPB inherited from other agencies should be the CFPB’s highest priority for streamlining.

The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred to the CFPB rulemaking authority under 14 federal consumer financial laws that had previously been vested in seven other federal agencies. According to its notice requesting comments, the CFPB wants to start reviewing the inherited regulations notwithstanding the press of its rulemaking obligations under the mortgage lending and servicing provisions of Dodd-Frank Title XIV. Most of those provisions require implementing regulations by January 2013.

The CFPB will soon republish all of the inherited regulations—which will be codified in Chapter X of Title 12 of the Code of Federal Regulations—incorporating only technical changes either to reflect the transfer of authority or certain amendments to the underlying statutes made by the Dodd-Frank Act. However, the CFPB is now seeking public input because it “believes there may be opportunities to streamline the inherited regulations by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions.”

In its notice, the CFPB describes its focus as identifying improvements it can make without statutory amendments requiring Congressional action. The notice contains a series of general questions dealing with the following three areas:

  • The approach the CFPB should take in reviewing the inherited regulations, such as whether it should focus on particular regulations or on all regulations that apply to a particular market sector
  • The commenter’s highest priorities for streamlining, with any suggestions to be accompanied by a description and, where possible, quantification, of the potential benefits and costs of the changes to consumers and providers, and supporting evidence, such as empirical models, data, research, or case studies
  • Practical measures the CFPB can take, apart from revising regulations, to ease compliance burdens and to promote, or remove obstacles to, innovation in consumer financial services

The notice also requests comments on a list of specific potential streamlining opportunities: (1) inconsistent definitions or undefined terms in various inherited regulations, (2) the requirement to provide annual privacy notices in certain circumstances, such as when the provider’s privacy practices have not changed since the last notice, (3) the requirement to post an ATM sign about fees when fees must also be disclosed on the ATM screen or in a paper notice, (4) the application of Regulation C reporting requirements to depository institutions that make or refinance small numbers of loans, (5) the differing data collection exemptions in Regulations B and C and the absence of any size-based exemptions for Regulation B’s adverse action notice requirement, (6) the thresholds for Regulation Z coverage, (7) the potential for the ability to repay requirement to unduly restrict the availability of credit cards for certain categories of individuals, (8) limits on when disclosures can be provided electronically and the potential use of text messages to provide such disclosures, and (9) technological and other changes that may warrant revisions to reporting and disclosure requirements of the Interstate Land Sales Full Disclosure Act.

The notice outlines several possible scenarios for the CFPB’s next step after it has received the requested input and determined its priorities. It might issue a notice of proposed rulemaking to streamline specific provisions, fold such proposals into broader Dodd-Frank rulemaking, or address specific provisions when it undertakes a broader review of the inherited regulations in due course.

Comments are due 90 days after the date the notice is published in the Federal Register and commentators will have an additional 30 days to respond to other comments.

Ballard Spahr’s Consumer Financial Services Group produces the CFPB Monitor, a blog that focuses exclusively on important CFPB developments. To subscribe, use the link provided to the right. The group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws throughout the country, and its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).

For more information, please contact Practice Leader Alan S. Kaplinsky, 215.864.8544 or; Practice Leader Jeremy T. Rosenblum, 215.864.8505 or; John L. Culhane, Jr., 215.864.8535 or; Barbara S. Mishkin, 215.864.8528 or; or Mark J. Furletti, 215.864.8138 or 


Copyright © 2011 by Ballard Spahr LLP.
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