After a bill was passed out of committee in the House of Representatives last week, a companion bill has been introduced in the Senate that aims to improve the transparency and predictability of guidance issued by the Bureau of Consumer Financial Protection.
The House bill — H.R. 5534 — was introduced in by Rep. Sean Duffy [R-Wisc.] back in April and was passed by the House Financial Services Committee last week, 38-14. On Monday, Sen. Orrin Hatch [R-Utah], introduced S. 3443. Called the GUIDE Act (Give Useful Information to Define Effective Compliance Act), the Senate bill has been referred to the Senate Banking Committee for consideration.
“The CFPB has immense responsibility in protecting consumers,” Hatch said in a statement. “With this responsibility comes the need for effective transparency and genuine accountability. This bill helps consumers and businesses better understand the agency’s rules, and it also reduces the risk of misinterpretation of guidance. The GUIDE Compliance Act brings greater clarity and certainty to the CFPB’s rulemaking process so that American households and businesses can consume, save, and invest with confidence.”
Among the provisions in the bill are:
- Requires the Director of the CFPB to issue guidance, including written interpretative rules, bulletins, statements of policy, and frequently asked questions to help facilitate compliance;
- Mandates that the CFPB publish in the Federal Register the definitions, criteria, timelines and process for issuing each type of guidance the Bureau shall provide, within 30 months of the legislation’s enactment;
- Protects businesses from liability for relying, in good faith, on guidance issued by the CFPB in effect at the time of such action;
- Requires the CFPB to establish a process and timeframes for requests for guidance, including time limits to provide answers in response to requests for guidance, and a process for amending or revoking guidance;
- Requires the CFPB to develop guidelines for determining the size of any civil money penalties and publish these guidelines in the Federal Register within 30 months of enactment;
- Includes support from the Mortgage Bankers Association, American Land Title Association, National Association of Mortgage Brokers, National Association of Home Builders, National Association of Federally-Insured Credit Unions, Credit Union National Association, Community Home Lenders Association, Community Mortgage Lenders Association, ACA International, Consumer Mortgage Coalition, and Manufactured Housing Institute.