Rule2022-09107
Supervisory Authority Over Certain Nonbank Covered Persons Based on Risk Determination; Public Release of Decisions and Orders
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 29, 2022
Effective
April 29, 2022
Issuing agencies
Consumer Financial Protection Bureau
Abstract
The Consumer Financial Protection Bureau (Bureau) is amending an aspect of procedures for establishing supervisory authority based on a risk determination. Specifically, the Bureau is adding a mechanism for the Bureau to make final decisions and orders in these proceedings public. The Bureau welcomes comments on this rule, and the Bureau may make further amendments if it receives comments warranting changes.
Full Text
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<title>Federal Register, Volume 87 Issue 83 (Friday, April 29, 2022)</title>
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[Federal Register Volume 87, Number 83 (Friday, April 29, 2022)]
[Rules and Regulations]
[Pages 25397-25398]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-09107]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 87, No. 83 / Friday, April 29, 2022 / Rules
and Regulations
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1091
[Docket No. CFPB-2022-0024]
Supervisory Authority Over Certain Nonbank Covered Persons Based
on Risk Determination; Public Release of Decisions and Orders
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Procedural rule; request for public comment.
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SUMMARY: The Consumer Financial Protection Bureau (Bureau) is amending
an aspect of procedures for establishing supervisory authority based on
a risk determination. Specifically, the Bureau is adding a mechanism
for the Bureau to make final decisions and orders in these proceedings
public. The Bureau welcomes comments on this rule, and the Bureau may
make further amendments if it receives comments warranting changes.
DATES: This procedural rule is effective on April 29, 2022. Comments
must be received on or before May 31, 2022.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2022-
0024, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#5d6f6d6f6f701c3038333930383329702932700d3c2f29706c6d646c1d3e3b2d3f733a322b"><span class="__cf_email__" data-cfemail="86b4b6b4b4abc7ebe3e8e2ebe3e8f2abf2e9abd6e7f4f2abb7b6bfb7c6e5e0f6e4a8e1e9f0">[email protected]</span></a>. Include
Docket No. CFPB-2022-0024 in the subject line of the message.
<bullet> Mail/Hand Delivery/Courier: Comment Intake--Supervisory
Authority Over Certain Nonbank Covered Persons Based on Risk
Determination; Public Release of Decisions and Orders, Consumer
Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.
Instructions: The Bureau encourages the early submission of
comments. All submissions should include the agency name and docket
number for this rulemaking. Because paper mail in the Washington, DC
area and at the Bureau is subject to delay, and in light of
difficulties associated with mail and hand deliveries during the COVID-
19 pandemic, commenters are encouraged to submit comments
electronically. In general, all comments received will be posted
without change to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. In addition, once the
Bureau's headquarters reopens, comments will be available for public
inspection and copying at 1700 G Street NW, Washington, DC 20552, on
official business days between the hours of 10 a.m. and 5 p.m. Eastern
Time. At that time, you can make an appointment to inspect the
documents by telephoning 202-435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Proprietary information or sensitive personal information, such as
account numbers or Social Security numbers, or names of other
individuals, should not be included. Comments will not be edited to
remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Christopher Shelton, Senior Counsel,
Legal Division, at 202-435-7700. If you require this document in an
alternative electronic format, please contact
<a href="/cdn-cgi/l/email-protection#fbb8bdabb9a4ba98989e888892999297928f82bb989d8b99d59c948d"><span class="__cf_email__" data-cfemail="22616472607d6341414751514b404b4e4b565b62414452400c454d54">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Discussion
Among other sources of supervisory authority, the Bureau can
supervise a nonbank covered person that the Bureau ``has reasonable
cause to determine, by order, after notice to the covered person and a
reasonable opportunity for such covered person to respond . . . is
engaging, or has engaged, in conduct that poses risks to consumers with
regard to the offering or provision of consumer financial products or
services.'' \1\ The Bureau issued a procedural rule in 2013 to govern
these proceedings.\2\ Section 1091.115(c) of the existing rule
provides, in summary, that documents, records or other items in
connection with a proceeding under part 1091 shall be deemed
confidential supervisory information.
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\1\ 12 U.S.C. 5514(a)(1)(C). The Bureau must base such
reasonable-cause determinations on complaints collected by the
Bureau under 12 U.S.C. 5493(b)(3), or on information collected from
other sources. Id.
\2\ 78 FR 40351 (July 3, 2013); see also 85 FR 75194 (Nov. 24,
2020) (updating certain cross-references to 12 CFR part 1070).
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The Bureau is now adding a new Sec. 1091.115(c)(2), which provides
an exception regarding final decisions and orders by the Director. A
central principle of the supervisory process is confidentiality. At the
same time, these decisions and orders present unique considerations
compared to other supervisory activity. There is a public interest in
transparency when it comes to these potentially significant rulings by
the Director as head of the agency. Also, if a decision or order is
publicly released, it would be available as a precedent in future
proceedings. Accordingly, the Bureau believes that there should be a
procedural mechanism to determine whether all or part of a decision or
order should be publicly released. The process established in Sec.
1091.115(c)(2) is a straightforward one. In summary, within seven days
of service of the decision or order, the respondent has the option of
filing a submission on this issue, and then the Director will determine
whether the decision or order will be released on the Bureau's website,
in whole or in part.\3\
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\3\ The Bureau also notes three features of this provision.
First, the computation of ``days'' is governed by existing Sec.
1091.114. Second, the Director's authority regarding public release
could be delegated to a designee of the Director under existing
Sec. 1091.101. Third, the Bureau is not extending the staff
separation-of-functions requirement in Sec. 1091.109(c), which
applies to the Director's final decision and order, to the
Director's subsequent determination regarding public release. Doing
so would not be required by law, and the routine determination of
whether to post material on the Bureau's website is not sufficiently
significant to warrant doing so.
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In this rule, the Bureau is not endeavoring to codify a standard on
the issue of public release. However, the Bureau generally anticipates
applying Exemptions 4 and 6 of the Freedom of Information Act to
information submitted by respondents that is reflected in final
decisions and orders.\4\ Exemption 4 applies to ``trade secrets and
commercial or financial information obtained from a person and
privileged or confidential,'' while Exemption 6 applies to ``personnel
and medical files and similar files the disclosure of which would
constitute a clearly unwarranted
[[Page 25398]]
invasion of personal privacy.'' \5\ The Bureau would also consider
whether there are other reasons to not publicly release a final
decision or order, in whole or in part. The Bureau welcomes any
comments on whether it should amend the rule to codify a standard for
determinations regarding public release.
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\4\ 5 U.S.C. 552(b)(4), (b)(6).
\5\ Id.
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The Bureau notes that this rule will have limited effects on the
public. Nonbank covered persons that are respondents may incur
incidental costs, if they choose to prepare submissions on the issue of
public release. The rule itself will not trigger public release of
decisions and orders, since it simply establishes a procedure to
consider that issue. If the Bureau does ultimately decide to release a
decision or order, that should generally benefit covered persons,
consumers, and other members of the public by giving them a better
understanding of the Bureau's decisionmaking.
In formulating this rule, the Bureau has consulted or offered to
consult with the prudential regulators and the Federal Trade
Commission.
II. Regulatory Requirements
As a rule of agency organization, procedure, or practice, this rule
is exempt from the notice-and-comment rulemaking requirements of the
Administrative Procedure Act.\6\
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\6\ 5 U.S.C. 553(b).
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Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\7\ Moreover, the Bureau's Director
certifies that this rule will not have a significant economic impact on
a substantial number of small entities. Therefore, an analysis is also
not required for that reason.\8\ As a result of the rule, respondents
in the relevant proceedings may choose to make submissions on the issue
of public release. Some of these respondents may be small entities
under the Regulatory Flexibility Act, but they would represent a very
small fraction of small entities in consumer financial services
markets. Accordingly, the number of small entities affected is not
substantial.
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\7\ 5 U.S.C. 603, 604.
\8\ 5 U.S.C. 605(b).
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The Bureau has also determined that this rule does not impose any
new or revise any existing recordkeeping, reporting, or disclosure
requirements on covered entities or members of the public that would be
collections of information requiring approval by the Office of
Management and Budget under the Paperwork Reduction Act.\9\
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\9\ 44 U.S.C. 3501-3521.
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List of Subjects in 12 CFR Part 1091
Administrative practice and procedure, Consumer protection, Credit,
Trade practices.
Authority and Issuance
For the reasons set forth above, the Bureau amends 12 CFR part 1091
as set forth below:
PART 1091--PROCEDURAL RULE TO ESTABLISH SUPERVISORY AUTHORITY OVER
CERTAIN NONBANK COVERED PERSONS BASED ON RISK DETERMINATION
0
1. The authority citation for part 1091 continues to read as follows:
Authority: 12 U.S.C. 5512(b)(1), 5514(a)(1)(C), 5514(b)(7).
0
2. In Sec. 1091.115, add headings to paragraphs (a) and (b) and revise
paragraph (c) to read as follows:
Sec. 1091.115 Change of time limits and confidentiality of
proceedings.
(a) Change of time limits. * * *
(b) No substantive rights. * * *
(c) Confidentiality--(1) General rule. In connection with a
proceeding under this part, including a petition for termination under
Sec. 1091.113, all documents, records or other items submitted by a
respondent to the Bureau, all documents prepared by, or on behalf of,
or for the use of the Bureau, and any communications between the Bureau
and a person, shall be deemed confidential supervisory information
under 12 CFR 1070.2(i)(1). However, this paragraph does not apply to
the version of a document that is released on the Bureau's website
under paragraph (c)(2).
(2) Publication of final decisions and orders by the Director. The
Director will make a determination regarding whether a decision or
order under Sec. 1091.103(b)(2), Sec. 1091.109(a), or Sec.
1091.113(e) will be publicly released on the Bureau's website, in whole
or in part. The respondent may file a submission regarding that issue,
within seven days after service of the decision or order. The Director
may also decide that the Director's determination regarding public
release will itself be released on the website, in whole or in part.
Section 1091.109(c) is not applicable to determinations under this
paragraph.
Rohit Chopra,
Director, Consumer Financial Protection Bureau.
[FR Doc. 2022-09107 Filed 4-28-22; 8:45 am]
BILLING CODE 4810-AM-P
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