In the latest in its series of comment letters to the Consumer Financial Protection Bureau responding to the bureau’s 12 requests for information, the American Bankers Association emphasized the important role of clear and agency-binding guidance in facilitating compliance with regulations and added that guidance should not be used as a basis for enforcement actions.
Specifically, ABA urged the bureau to acknowledge that it is bound by the guidance it issues, which will help banks comply in confidence; to seek public comment as guidance is developed; to provide timely answers to requests for regulatory interpretations; and to provide examiner training that emphasizes the role of guidance in the supervisory process.
For example, ABA noted, the CFPB currently adds disclaimers to several guidance materials noting that they are intended only to help with implementation. No other financial regulators use disclaimers to the same extent. “Fundamentally, disclaimers undermine the value of guidance,” ABA said. “In fact, some bankers have said that, due to the disclaimers, they pay little or no attention to some bureau guidance.”
ABA also noted that “because guidance is intended to assist regulated entities and the public with compliance, it is inappropriate to use it as a basis for enforcement actions and formal supervisory criticism.” The association added that enforcement should continue to be based on “the applicable statutes, the regulations promulgated under them in accordance with the requirements of administrative law, and judicial interpretations of both.” For more information, contact ABA’s Rob Rowe.