CFPB’s “Advisory Opinion Program” Proposal Offers Corporations Protection From Consumers

CFPB is accepting comments on this proposal through Friday, Aug. 21.

In mid-June, while the rest of the country was confronting racial injustice, the Consumer Financial Protection Bureau (CFPB) released a notice  offering corporations streamlined, private access to safe harbor interpretations of the laws under its jurisdiction.  Under the CFPB’s proposed “Advisory Opinion Program,” corporations, operating in the gray zone of the law, can, on the basis of a confidential, potentially anonymous submission, ask for the CFPB’s blessing of their business practices.  There is no opportunity for consumers or their advocates to present a dissenting view.  The CFPB has made clear that these advisory opinions will, at least sometimes, offer a safe harbor for legally suspect acts, shielding corporations from liability and depriving harmed consumers of legal recourse. 

The CFPB stated that, because the advisory opinion program is a rule about internal agency procedures, it did not need to take comments on the program.  Nonetheless, it is accepting comments  through the end of the day on Friday, August 21.  The questions it asks point towards a fixed decision to aid corporations at the public’s expense:  How can the CFPB better “accommodate” those who want the safe harbor but don’t want to pay top dollar for a lawyer to prepare the request? How should the CFPB handle “sensitive” information and, presumably, shield it from public view?  

Peeking Behind the Curtain of Internal Agency Procedures

Still, understanding how the CFPB proposes to run its advisory opinion program, like other aspects of internal agency procedure, is an important part of effective regulatory advocacy.  What opportunities does the advisory opinion program hold for advocates, if any?  What internal processes could advocates leverage to promote the interests of consumers and marginalized communities?  What does this peek behind the curtain of “internal agency procedures” tell us about how the CFPB thinks about its work?


First and foremost, perhaps, is that this is an agency attuned to business interests.  Businesses, although vociferous in their opposition to guidance  when used to make clear enforceable obligations under the law, have long sought the ability to get public, written guidance from the CFPB that they could rely on in legal proceedings brought by consumers or regulators.  The CFPB itself expects that requestors will be primarily businesses or other for-profit entities.” The promised anonymity, if a requestor goes through a third-party, like a law firm or trade association, and confidentiality of information submitted both speak to business interests, not consumer concerns or the public interest.

The CFPB’s proposed process for its advisory opinion program is strikingly lop-sided.  The Administrative Conference of the United States  suggested the CFPB might find of ACUS Recommendation 2019-1, Agency Guidance Through Interpretive Rules “particularly useful.”  That recommendation highlights the importance of “afford[ing] members of the public a fair opportunity to argue for… analyses other than those set forth in an interpretive rule.”  ACUS urges that, at the least, there be a post hoc opportunity for public engagement.  The closest the CFPB comes to asking for comment on this point is how to make the advisory opinions “available to the public in a useful format.”

Consumers and Industry All Lose in the Long Run

Throughout the Dodd-Frank Act, the CFPB is charged with listening, not just to consumers, but to “traditionally underserved communities.”  The Office of Research, market monitoring, the Office of Community Affairs are all explicitly mandated to gather information on and from traditionally underserved communities, in order to inform the CFPB’s rulemaking and policy agenda.  The CFPB’s advisory opinion proposal not only ignores the administrative law best practices suggested by the ACUS but turns its back on those traditionally underserved communities the Dodd-Frank Act centered.

This proposal also runs the risk of not working well, even for the industry stakeholders it intends to benefit.  The Federal Reserve Board tried a similar ad hoc regulatory approach in the early years of the Truth-in-Lending Act and abandoned it in 1980, judging it an abject failure.  The sheer volume of the more than 1500 interpretations and letters issued over a 12-year period complicated compliance.  The Senate Report on the TILA Simplification bill (S. Rep. No. 368, 96th Cong., 2d Sess.) cited those advisory opinions as a key reason “simplification” of the pre-eminent consumer protection statute was needed, noting, “Creditors . . . have encountered increasing difficulty in keeping current with a steady stream of administrative interpretations . . . .”  The CFPB doesn’t mention this history in its proposal, so we don’t know how or if the CFPB plans to distinguish its approach from the failed approach of the Federal Reserve Board.

CRREA Project’s Take

An advisory opinion program isn’t necessarily wrong.  Providing clarity on regulations is helpful, and not every issue warrants full notice-and-comment treatment.  But a program cloaked in secrecy, affording confidentiality and anonymity to big business without assuring any input from consumers falls short.  The CFPB should scrap its advisory opinion program until it can develop a proposal that explains how consumer interests will be protected and how the public will receive the benefit of open and transparent processes.