CFPB Director Launches New System to ‘Promote’ Consistent Enforcement Strategy Across Agencies

The new measure adds to the CFPB leadership’s regulation by enforcement strategy for financial services companies instead of engaging stakeholders and conducting due process.

05/23/2022 3:45 P.M.

4 minute read

Consumer Financial Protection Bureau Director Rohit Chopra has announced a new enforcement strategy known as “Consumer Financial Protection Circulars” that will be issued to the broad set of government agencies responsible for enforcing federal consumer financial law, according to a news release.

The circulars will be “policy statements under the Administrative Procedure Act and will be released publicly to increase transparency for the benefit of the public and regulated entities,” the CFPB reports.

They will be published on the CFPB website and in the Federal Register with Chopra’s authorization.

“Consumer Financial Protection Circulars will provide background information about applicable law, articulate considerations relevant to the CFPB’s exercise of its authorities, and advise other parties with authority to enforce federal consumer financial law,” according to the news release.

The CFPB says it is “beginning to identify a number of issues that would benefit from clear and consistent enforcement, and the CFPB intends to issue new Consumer Financial Protection Circulars to advance these goals.”

The CFPB issued the first circular on May 17 on “deceptive representations involving the Federal Deposit Insurance Corp’s name or logo or deposit insurance.”

It lists a question and response from the bureau and analysis that outlines the laws and regulations administered by the CFPB relating to the offering or providing of deposit accounts.

“ACA International and its members recognize and welcome clear and accurate guidance from regulators as a benefit to the industry,” said ACA International CEO Scott Purcell. “However, rulemaking by enforcement is not the appropriate way to govern, and we urge the CFPB to abide by the Administrative Procedure Act before creating any new standards.”

The CFPB news release found here states:

“The CFPB is the principal regulator responsible for administering the federal consumer financial laws, including the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Consumer Financial Protection Act, and many others.

However, the CFPB is not the only enforcer of these laws. Enforcement responsibility is spread among a large set of state and federal government agencies to protect families and honest businesses together.

The CFPB will also release Consumer Financial Protection Circulars publicly to increase transparency for the benefit of the public and regulated entities.”

In the release, Chopra also stated that the CFPB is beginning to “identify a number of issues that would benefit from clear and consistent enforcement, and the agency intends to issue new Consumer Financial Protection Circulars to advance these goals.”

Enforcers, and the broader public, can provide feedback and comments on any Consumer Financial Protection Circulars to [email protected].

Bureau’s Regulatory Strategy

Meanwhile, during House testimony last month, Chopra said the CFPB is “dramatically increasing its issuance of guidance,” especially where it can help small entities and new entrants in the market, ACA previously reported.

However, members of the House Financial Services Committee countered that the bureau is using public statements and press releases as a way of influencing regulated entities’ behavior.

ACA also noted this trend in its letter to the committee on behalf of members.

“Regulation through press releases, to try to force unresearched agendas in the financial services marketplace, is an extremely dangerous way to regulate major sectors of the economy relied on by consumers,” Purcell said. “Under the Dodd-Frank Reform and Consumer Protection Act, Congress contemplated several checks and balances on this system of creating policy, including the Small Business Regulatory Enforcement Fairness Act of 1996 process to protect small businesses from overly burdensome rules that do not properly consider their size and structure. The creation of new policies outside of this process disregards the Dodd-Frank Act and the original purpose of the CFPB.”

ACA is working diligently to educate members of Congress on both sides of the aisle about the bureau’s regulatory approach.

As Chopra continues his work leading the CFPB, ACA urges the bureau to seek feedback from all stakeholders and plans to continue engagement with the bureau.

ACA staff and members met with lawmakers and discussed these topics during the 2022 Washington Insights Fly-In May 18-19 in Washington, D.C. The Fly-In builds on the success of the October 2021 event, where ACA members met with more than a dozen members of Congress on both sides of the aisle in Washington, D.C.

For more information on ACA’s advocacy efforts and resources to share with lawmakers, read ACA’s new advocacy book and about the Fly-In here.

Related Content from ACA International:

CFPB’s Advisory Opinion on Fair Lending Laws Signals Chopra’s Regulatory Strategy

CFPB’s ‘Regulation by Press Release’ in the Limelight at Chopra’s House Testimony

Senate Lawmakers Revisit Overreach and Regulatory Burden in Hearing with CFPB Director

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

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