The American Bankers Association has sent a comment letter to the CFPB challenging the Bureau’s use of the generic clearance process to conduct research in connection with its overdraft rulemaking.  The letter was submitted in response to the CFPB’s request for approval from the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) of an existing generic clearance “to collect quantitative data on effective strategies and consumer experiences….” (Qualitative Consumer Education Generic Clearance).

The CFPB had indicated that the purpose of the Qualitative Consumer Education Generic Clearance was “to develop a deeper understanding of effective financial education and empowerment strategies.”  The ABA asserts that the CFPB “has used this clearance to conduct information collections on substantive and policy-related issues-namely, overdraft services-which is prohibited by the guidance interpreting the PRA that was published by the Office of Information and Regulatory Affairs (OIRA) of the [OMB].”  According to the ABA, this guidance makes such collections subject to the standard PRA clearance process, which requires notice to the public and an opportunity for comment.

The ABA contends that after obtaining approval for the Qualitative Consumer Education Generic Clearance in 2013, the CFPB improperly used the clearance to seek approval, without prior public notice, for an information collection on “Qualitative Research of Consumer Understanding and Decision-making Related to Overdrafts.”  The ABA states that because the collection will clearly inform the CFPB’s overdraft rulemaking, it should have been pursued through a standard clearance. The ABA observes that the topics involved in the collection, such as the frequency of the respondents’ usage of overdraft services, “bear directly on policy questions the Bureau is almost certainly considering as part of its rulemaking on overdraft, including the need for increased disclosures and limitations on usage.”

The ABA urges the CFPB to refrain from improperly using a generic clearance to conduct an individual collection on substantive or policy issues and to seek approval for a standard clearance when it desires to conduct such a collection.  The ABA has also challenged the CFPB’s use of the generic clearance process for previous collections.