The suggestion box is officially open at the CFPB for comments from the public on which provisions of the regulations it inherited from other agencies should be the CFPB’s highest priority for streamlining.

The Dodd-Frank Act transferred to the CFPB rulemaking authority under 14 federal consumer financial laws that had previously been vested in seven other federal agencies.  According to its notice requesting comments, the CFPB wants to start reviewing the inherited regulations despite the press of its rulemaking obligations under the mortgage lending and servicing provisions of Dodd-Frank Title XIV. Most of those provisions require implementing regulations by January 2013. Comments are due 90 days after the date the notice is published in the Federal Register and commentators will have an additional 30 days to respond to other comments.

The CFPB will soon republish all of the inherited regulations—which will be codified in Chapter X of Title 12 of the Code of Federal Regulations—incorporating only technical changes to reflect either the transfer of authority or certain amendments to the underlying statutes made by the Dodd-Frank Act.  However, the CFPB is now seeking public input because it “believes there may be opportunities to streamline the inherited regulations by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions.”

The CFPB is looking for improvements it can make without the need for Congress to amend statutes. The notice contains a series of general questions dealing with the following three areas:

  • the approach the CFPB should take in reviewing the inherited regulations, such as whether it should focus on particular regulations or on all regulations that apply to a particular market sector;
  • the commenter’s highest priorities for streamlining, with any suggestions to be accompanied by a description and ,where possible, quantification, of the potential benefits and costs of the changes to consumers and providers and supporting evidence, such as empirical models, data, research or case studies; and
  • practical measures the CFPB can take, apart from revising regulations, to ease compliance burdens and to promote, or remove obstacles to, innovation in consumer financial services.

The notice also requests comments on a list of specific potential streamlining opportunities. The opportunities identified include (1) inconsistent definitions or undefined terms in various inherited regulations, (2) the requirement to provide annual privacy notices in certain circumstances, such as when the provider’s privacy practices have not changed since the last notice, (3) the requirement to post an ATM sign about fees when fees must also be disclosed on the ATM screen or in a paper notice, (4) the thresholds for Reg. Z coverage, (5) the potential for the ability to repay requirement to unduly restrict the availability of credit cards for certain categories of individuals, and (6) limits on when disclosures can be provided electronically and the potential use of text messages to provide such disclosures.

The CFPB isn’t committing to what its next step will be. After it has received the requested input and determined its priorities, the CFPB might issue a notice of proposed rulemaking to streamline specific provisions, fold such proposals into broader Dodd-Frank rulemaking, or address specific provisions when it undertakes a broader review of the inherited regulations in due course. Comments are due 90 days after the date the notice is published in the Federal Register and commentators will have an additional 30 days to respond to other comments.

The elimination of burdensome and unnecessary regulations is sorely needed and will benefit both consumers and industry. We applaud the CFPB’s initiative and hope it will lead to a productive dialogue between the CFPB and industry.