WASHINGTON — Rep. Sean Duffy, R-Wis., has introduced legislation designed to make the Consumer Financial Protection Bureau’s guidance process more transparent.
The bill, co-sponsored by Rep. Ed Perlmutter, D-Colo., would require the CFPB director to issue “guidance” that "is necessary or appropriate to enable the bureau to carry out federal consumer financial law, including facilitating compliance with such law." It also prohibits penalizing institutions that rely in good faith on guidance from the bureau.
“I’m proud to sponsor bipartisan legislation to bring predictability and transparency to the CFPB’s rule-making process,” Duffy said in a press release last week. “The CFPB should focus on its mission to actually protect consumers rather than play ‘gotcha’ with ambiguous and surprising guidance for mortgage lenders.”
The bill was introduced as the CFPB's guidance process has encountered significant pushback, with companies objecting to the bureau and other regulators issuing guidance that operates more like a binding regulation. The Senate recently overturned a 2013 CFPB guidance restricting indirect auto loan markups after the Government Accountability Office had ruled that the guidance constituted a rule. A House vote on the Senate measure is scheduled for this week.
The CFPB would be required under Duffy's legislation to establish time limits to provide answers in response to requests for guidance, as well as create a process for amending and revoking guidance, including public notice and comment.