U.S. Senators James Lankford and Orrin Hatch Monday introduced legislation to clean up the rulemaking process within the Bureau of Consumer Financial Protection (BCFP). The Give Useful Information to Define Effective Compliance Act (GUIDE Compliance Act) would instruction the agency to open up its rulemaking process and make it more predictable. In federal government fashion, the BCFP changed its name from the Consumer Financial Protection Bureau (CFPB) which was created in reaction to the financial crisis caused by the packaging of bad mortgages.
“The federal rulemaking process should be transparent and accountable to every American, and the BCFP should provide necessary or appropriate guidance related to the rules they implement,” said Lankford. “The GUIDE Compliance Act will provide consumers and providers a strong grasp of the rules issued by the BCFP, including a well-defined understanding of how those rules will directly affect them. This is a good, commonsense bill that will provide clarity for consumers and help prevent ‘gotcha’ enforcement. I look forward to the bill working its way through the legislative process to become law.”
“The CFPB has immense responsibility in protecting consumers. With this responsibility comes the need for effective transparency and genuine accountability,” Hatch said. “This bill helps consumers and businesses better understand the agency’s rules, and it also reduces the risk of misinterpretation of guidance. The GUIDE Compliance Act brings greater clarity and certainty to the CFPB’s rulemaking process so that American households and businesses can consume, save, and invest with confidence.”
The GUIDE Compliance Act:
- Requires the Director of the BCFP to issue guidance, including written interpretative rules, bulletins, statements of policy, and frequently asked questions to help facilitate compliance;
- Mandates that the BCFP publish in the Federal Register the definitions, criteria, timelines and process for issuing each type of guidance the Bureau shall provide, within 30 months of the legislation’s enactment;
- Protects businesses from liability for relying, in good faith, on guidance issued by the BCFP in effect at the time of such action;
- Requires the BCFP to establish a process and timeframes for requests for guidance, including time limits to provide answers in response to requests for guidance, and a process for amending or revoking guidance;
- Requires the BCFP to develop guidelines for determining the size of any civil money penalties and publish these guidelines in the Federal Register within 30 months of enactment;
- Includes support from the Mortgage Bankers Association, American Land Title Association, National Association of Mortgage Brokers, National Association of Home Builders, National Association of Federally-Insured Credit Unions, Credit Union National Association, Community Home Lenders Association, Community Mortgage Lenders Association, ACA International, Consumer Mortgage Coalition, and Manufactured Housing Institute.
