Federal Agencies, including the BCFP, Clarify Role of Regulatory Guidance
Regulatory guidance is separate from laws and regulations enforced by the agencies, according to joint statement.
9/12/2018 11:00 AM
Federal agencies with oversight of financial services industries issued a joint statement this week clarifying the role of supervisory guidance in their work compared to laws or regulations.
“The statement from the agencies—the Federal Reserve Board, the Bureau of Consumer Financial Protection, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency—confirms that supervisory guidance does not have the force and effect of law, and the agencies do not take enforcement actions based on supervisory guidance,” according to a news release from the BCFP. “The joint statement explains that supervisory guidance can outline the agencies’ supervisory expectations or priorities and articulate the agencies’ general views regarding appropriate practices for a given subject area.”
The statement follows the issuance of the BCFP’s summer 2018 Supervisory Highlights report under the leadership of Acting Director Mick Mulvaney. That report notes it is available as guidance to industry participants on how their operations can remain in compliance with the consumer financial laws and includes examples of common opportunities for improvement, ACA International previously reported.
“ACA International appreciates this clarification, and continues to believe that rulemaking should not be done through enforcement actions,” said Leah Dempsey, ACA International’s vice president and senior counsel of federal advocacy, in response to the agencies’ statement. “To fulfill its statutory mission and obligations properly, the bureau must strictly adhere to fair, clear, and transparent enforcement processes and practices.”
Since Mulvaney started his term as acting director, the bureau continues to examine its regulatory and enforcement functions and pending rulemaking, including debt collection, ACA International previously reported. Earlier this year, Mulvaney announced a call for evidence and Request for Information series allowing the public and industry professionals to provide feedback. ACA International submitted comments in response to a majority of the requests.
According to Reuters, the federal agencies reportedly received industry criticism “that agencies are increasingly relying on such guidance” before issuing the statement this week.
In June, according to the article, U.S. Rep. Blaine Luetkemeyer, R-Mo., called upon the regulators to clarify the issue with a statement.
“I urge you to take dedicated efforts to ensure that examiners are appropriately educated about the use and role of guidance; and held accountable when guidance is applied inappropriately,” Luetkemeyer wrote in a June letter to leadership of the Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, BCFP, National Credit Union Administration and Securities and Exchange Commission leaders. Taking these steps will help to ensure that the law is observed in practice, and that regulated entities are aware of their rights and responsibilities without having to wonder whether the line between guidance and rule remains blurred.”
The agencies will also continue ongoing efforts to clarify the role of supervisory guidance including avoiding issuance of multiple supervisory guidance documents on the same topic and seeking comment on supervisory guidance.
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