Groups in the financial services industry request that President Joe Biden ask regulators, particularly the CFPB, to follow required rulemaking processes with stakeholder input and cost-benefit analysis.
12/11/2023 2:45 P.M.
2 minute read
ACA International has joined associations representing banks, credit card issuers and student loan servicers, among others, in seeking the Biden administration’s support for regulators to provide clear rules of the road in the financial services industry.
“Markets work best when the rules are clear, so it is possible to comply with them. Blog posts that contradict law or regulation, vague guidance that deems common practices like using form contracts or including certain terms and conditions in contracts as alleged violations of law, proclamations of the CFPB’s novel interpretation of law via amicus briefs, or enforcement actions that contradict state law, are not setting clear expectations that it is possible to follow,” the letter (PDF) to President Joe Biden states.
The associations implored Biden to emphasize the need for rulemaking processes, including the opportunity for notice and comment and cost-benefit analysis of proposed regulations within the administration.
“Rulemaking includes an opportunity for notice and comment, giving stakeholders the chance to ask questions, review (and replicate) the underlying data and analysis in support of a proposed rule, point out potential inconsistences with different laws, and outline potential impacts on consumers and businesses,” the letter states. “The CFPB continues to creatively avoid following the notice and comment rulemaking process as required under the Administrative Procedure Act.”
The associations note their members share the CFPB’s goal of “making consumer financial markets work for consumers, responsible providers, and the economy as a whole.”
However, they explain, “spotty regulation creates an unlevel playing field that discourages financial institutions from taking risks on new products that may help underserved communities and reach customers who may pose more of a risk.”
Examples of guidance (PDF) to help agencies develop regulations that foster competition in the marketplace from the Office of Information and Regulatory Affairs (OIRA) have, unfortunately, not been embraced by the CFPB, the associations wrote.
In addition to ACA, the associations signing on to the letter include:
- American Financial Services Association
- American Land Title Association
- Consumer Bankers Association
- Credit Union National Association
- Equipment Leasing and Finance Association
- Innovative Lending Platform Association
- National Association of Federally-Insured Credit Unions
- National Bankers Association
- Online Lenders Alliance
Some of those associations were in a group with ACA that also recently requested the CFPB to conduct an Advanced Notice of Proposed Rulemaking on its potentially sweeping changes to the Fair Credit Reporting Act, ACA previously reported.
Read the complete letter to the Biden administration on rulemaking processes here (PDF.)
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.