Bureau finalizes advisory opinions policy, allowing entities to seek clarity on regs

Credit unions, banks, and other entities questioning whether to comply with regulatory requirements can submit a request to the federal consumer financial protection agency to clear up any uncertainty, the agency said under a new policy that was finalized Monday.

“Regulatory certainty promotes compliance if the law applies and avoids unnecessary compliance costs if the law does not,” the Consumer Financial Protection Bureau (CFPB) said of its new policy in a release.

In June, the bureau unveiled a pilot program to allow entities to submit a request for clarity on its regulations “where uncertainty exists.” The “pilot advisory opinion” program (referred to as “AO”) reviewed the submissions, selected topics based on the program’s priorities, and then made responses available to the public. The program was proposed as a procedural rule with a request for comment.

Monday’s release by the bureau made the program permanent. Under the final policy, the bureau said, any person or entity can submit a request for an advisory opinion via email (to advisoryopinion@cfpb.gov). The bureau said it would will review the submissions received, prioritize certain requests for response, and issue opinions with a description of the incoming request.

The bureau said it may also decide to issue advisory opinions on its own initiative, and that (to increase transparency), it would publish all advisory opinions in the Federal Register and on its website.

Meanwhile, the bureau said it issued two advisory opinions Monday:

  • Earned wage access (EWA) products: The agency said its first advisory opinion addresses whether EWA providers are offering the products within the scope of Regulation Z. “The advisory opinion aims to resolve regulatory uncertainty regarding the applicability of the definition of credit under Regulation Z and encourage further innovation in the EWA space,” the bureau wrote. The agency asserted that EWA products have recently emerged in the marketplace as a way for employees to meet short-term liquidity needs that arise between paychecks without individuals having to turn to other higher cost products.
  • Education loan products: The bureau said its advisory opinion clarifies that certain education loan products that refinance or consolidate a consumer’s pre-existing federal, or federal and private, education loans meet the definition of “private education loan” in Truth in Lending Act and Regulation Z and are subject to the disclosure and other requirements in subpart F of Regulation Z. “Lender compliance with these requirements will enhance the protection of borrowers who have taken out private educational loans,” the bureau said.

Consumer Financial Protection Bureau Finalizes Advisory Opinions Policy and Announces Two New Advisory Opinions