Supplemental Standards of Ethical Conduct for Employees of the Bureau of Consumer Financial Protection, 35883-35888 [2017-15597]
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35883
Rules and Regulations
Federal Register
Vol. 82, No. 147
Wednesday, August 2, 2017
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
BUREAU OF CONSUMER FINANCIAL
PROTECTION
5 CFR Part 9401
[Docket No. CFPB–2016–0050]
RIN 3209–AA15
Supplemental Standards of Ethical
Conduct for Employees of the Bureau
of Consumer Financial Protection
Bureau of Consumer Financial
Protection.
ACTION: Final rule.
AGENCY:
The Bureau of Consumer
Financial Protection (CFPB or Bureau),
with the concurrence of the Office of
Government Ethics (OGE), is issuing a
final rule amending the Supplemental
Standards of Ethical Conduct for
Employees of the Bureau of Consumer
Financial Protection (CFPB Ethics
Regulations) involving: Outside
employment for covered employees;
Bureau employees’ ownership or control
of certain securities; restrictions on
seeking, obtaining, or renegotiating
credit or indebtedness; disqualification
requirements based on existing credit or
indebtedness; and restrictions on
participating in matters involving
covered entities. The final rule also
clarifies and makes minor revisions to
certain definitions.
DATES: This final rule is effective
September 1, 2017.
FOR FURTHER INFORMATION CONTACT:
Amber Vail, Senior Ethics Counsel, at
(202) 435–7305 or Amy Mertz Brown,
Alternate Designated Agency Ethics
Official, at (202) 435–7256 at the Legal
Division, Consumer Financial
Protection Bureau.
SUPPLEMENTARY INFORMATION:
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SUMMARY:
I. Background
On January 10, 2017, the Bureau, with
OGE’s concurrence, published a
proposed rule in the Federal Register,
82 FR 2921, Jan. 10, 2017, proposing to
amend the CFPB Ethics Regulations.
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The proposed rule provided a 30-day
comment period, which ended on
February 9, 2017. The Bureau did not
receive any comments. The rationale for
the proposed rule, which the Bureau is
now adopting as final, is explained in
the preamble at: https://
www.federalregister.gov/documents/
2017/01/10/2016-31596/supplementalstandards-of-ethical-conduct-foremployees-of-the-bureau-of-consumerfinancial.
The Bureau has made six technical
changes in the final rule that are not
intended to change the substantive
meaning of the rule. First, in 5 CFR
9401.102, the Bureau removed the
phrase ‘‘on a mortgage’’ from the
definition of ‘‘indebted to an entity’’ to
clarify that the term includes any type
of servicer to whom payments are made.
Second, the Bureau replaced the phrase
‘‘he or she’’ with the term ‘‘employee’’
in the definition of ‘‘participate’’ in 5
CFR 9401.102. Third, the Bureau
inserted the phrase ‘‘or indebtedness’’ in
the section heading of 5 CFR 9401.108
and the subsection heading in
§ 9401.108(d) to highlight that the
restrictions in this section apply to both
credit and indebtedness. Fourth, the
Bureau added the phrase ‘‘or lenders’’ to
the section heading of 5 CFR 9401.109
to clarify that the restrictions in this
section apply to both creditors and
lenders. The Bureau added the phrase to
ensure that the language in the section
heading is parallel to the substantive
language regarding credit or
indebtedness in the text of that section.
The revision does not change the
substance of the rule. Fifth, the Bureau
made a grammatical correction by
changing the word ‘‘with’’ to ‘‘within’’
in 5 CFR 9401.111(b)(1). Finally, in
several places within the regulation, the
Bureau revised the phrase ‘‘is or
represents a party’’ to read ‘‘is a party
or represents a party.’’ This revision is
intended to clarify that the regulation
applies when an entity is a party, as
well as when an entity is representing
a party in a particular matter involving
specific parties.
II. Matters of Regulatory Procedure
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5
U.S.C. 601 et seq., as amended by the
Small Business Regulatory Enforcement
Fairness Act of 1996 (the RFA), requires
each agency to consider the potential
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impact of its regulations on small
entities, including small businesses,
small governmental units, and small
not-for-profit organizations, unless the
head of the agency certifies that the
rules will not have a significant
economic impact on a substantial
number of small entities. The Director of
the Bureau so certifies. The rule does
not impose any obligations or standards
of conduct for purposes of analysis
under the RFA, and it therefore does not
give rise to a regulatory compliance
burden for small entities.
Paperwork Reduction Act
The Bureau has determined that this
rule does not impose any new
recordkeeping, reporting, or disclosure
requirements on members of the public
that would be collections of information
requiring approval under the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501
et seq.).
List of Subjects in 5 CFR Part 9401
Conflict of interests, Government
employees.
Authority and Issuance
For the reasons set forth in the
preamble, the Bureau, in concurrence
with OGE, is amending part 9401 of title
5 of the Code of Federal Regulations as
follows:
PART 9401—SUPPLEMENTAL
STANDARDS OF ETHICAL CONDUCT
FOR EMPLOYEES OF THE BUREAU
OF CONSUMER FINANCIAL
PROTECTION
1. The authority citation for part 9401
is revised to read as follows:
■
Authority: 5 U.S.C. 7301; 5 U.S.C. App.
(Ethics in Government Act of 1978); E.O.
12674, 54 FR 15159 (April 12, 1989); 3 CFR,
1898 Comp., p.215, as modified by E.O.
12731, 55 FR 42547 (October 17, 1990); 3
CFR, 1990 Comp., p. 306; 5 CFR 2635.105,
2635.403, 2635.502 and 2635.803.
2. Revise § 9401.102 to read as
follows:
■
§ 9401.102
Definitions.
For purposes of this part:
CFPB Ethics Regulations means the
supplemental ethics standards set forth
in this part.
Control means the possession, direct
or indirect, of the power or authority to
manage, direct, or oversee.
Credit has the meaning set forth in 12
U.S.C. 5481(7) and as further defined in
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regulations promulgated by the Bureau
to implement that statute. A person may
have credit without any outstanding
balance owed.
Dependent child has the meaning set
forth in 5 CFR 2634.105(d). It includes
an employee’s son, daughter, stepson, or
stepdaughter if:
(1) Unmarried, under the age of 21,
and living in the employee’s household;
or
(2) Claimed as a ‘‘dependent’’ on the
employee’s income tax return.
Designated Agency Ethics Official
(DAEO) means the official within the
Bureau that the Director has appointed
to coordinate and manage the ethics
program at the Bureau, under 5 CFR
2638.104(a). For purposes of this part,
the term ‘‘DAEO’’ also includes the
Alternate DAEO appointed under 5 CFR
2638.104(d), and a designee of the
DAEO or Alternate DAEO unless a
particular provision says an authority is
reserved to the DAEO.
Director means the Director of the
Bureau.
Domestic partner means a person
with whom a Bureau employee:
(1) Has a close and committed
personal relationship and both parties
are at least 18 years of age, are each
other’s sole domestic partner and intend
to remain in the relationship
indefinitely, and neither is married to,
in a civil union with, or partnered with
any other spouse or domestic partner;
(2) Is not related by blood in a manner
that would bar marriage under the laws
of the jurisdiction in which the
employee resides;
(3) Is in a financially interdependent
relationship in which both agree to be
responsible for each other’s common
welfare and share in financial
obligations; and
(4) Has shared for at least six months
the same regular and permanent
residence in a committed relationship
and both parties intend to do so
indefinitely, or would maintain a
common residence but for an
assignment abroad or other
employment-related, financial, or
similar obstacle.
Employee means an employee of the
Bureau, other than a special
Government employee.
Entity supervised by the Bureau
means a person that is subject to the
Bureau’s supervision authority pursuant
to 12 U.S.C. 5514(a)(1) or 5515(a) and in
regulations promulgated thereunder, as
identified on a list to be maintained by
the Bureau.
Indebted or indebtedness means a
legal obligation under which an
individual or borrower received money
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or assets on credit, and currently owes
payment.
Indebted to an entity means an
obligation to make payments to an
entity as a result of an indebtedness,
whether originally made with that entity
or with another entity. This includes
without limitation, a servicer to whom
payments are made.
OGE Standards mean the Standards of
Ethical Conduct for Employees of the
Executive Branch contained in 5 CFR
part 2635.
Participate means personal and
substantial participation and has the
meaning set forth in 5 CFR
2635.402(b)(4). An employee
participates when, for example, the
employee makes a decision, gives
approval or disapproval, renders advice,
provides a recommendation, conducts
an investigation or examination, or takes
an official action in a particular matter,
and such involvement is of significance
to the matter. It requires more than
official responsibility, knowledge,
perfunctory involvement, or
involvement on an administrative or
peripheral issue.
Particular matter has the meaning set
forth in 5 CFR 2635.402(b)(3). The term
includes a matter that involves
deliberation, decision, or action and is
focused upon the interests of specific
persons or a discrete and identifiable
class of persons. It may include
governmental action such as legislation,
regulations, or policy-making that is
narrowly focused on the interests of a
discrete and identifiable class of
persons.
Particular matter involving specific
parties has the meaning set forth in 5
CFR 2641.201(h). Such a matter
typically involves a specific proceeding
affecting the legal rights of the parties or
an isolatable transaction or related set of
transactions between identified parties.
The term includes without limitation, a
contract, audit, enforcement action,
examination, investigation, litigation
proceeding, or request for a ruling.
Person has the same meaning set forth
in 5 CFR 2635.102(k). It includes
without limitation, an individual,
corporation and subsidiaries it controls,
company, association, firm, partnership,
society, joint stock company, or any
other organization or institution.
Practice of law means the provision of
legal advice or services where there is
a client relationship of trust or reliance.
One is presumed to be practicing law
when engaging in any of the following
conduct on behalf of another:
(1) Preparing any legal document,
including any deeds, mortgages,
assignments, discharges, leases, trust
instruments, or any other instruments
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intended to affect interests in real or
personal property, wills, codicils,
instruments intended to affect the
disposition of property of decedents’
estates, other instruments intended to
affect or secure legal rights, and
contracts except routine agreements
incidental to a regular course of
business;
(2) Preparing or expressing legal
opinions;
(3) Appearing or acting as an attorney
in any tribunal;
(4) Preparing any claims, demands or
pleadings of any kind, or any written
documents containing legal argument or
interpretation of law, for filing in any
court, administrative agency, or other
tribunal;
(5) Providing advice or counsel as to
how any of the activities described in
paragraphs (1) through (4) of this
definition might be done, or whether
they were done, in accordance with
applicable law; or
(6) Furnishing an attorney or
attorneys, or other persons, to render the
services described in paragraphs (1)
through (5) of this definition.
Security means an interest in debt or
equity instruments. The term includes
without limitation, secured and
unsecured bonds, debentures, notes,
securitized assets, commercial papers,
and preferred and common stock. The
term encompasses both current and
contingent ownership interests; a
beneficial or legal interest derived from
a trust; a right to acquire or dispose of
any long or short position in debt or
equity interests; interests convertible
into debt or equity interests; and
options, rights, warrants, puts, calls,
straddles, derivatives, and other similar
interests. It does not include deposits;
credit union shares; a future interest
created by someone other than the
employee or the employee’s spouse or
dependent child; or a right as a
beneficiary of an estate that has not been
settled.
Special Government employee has the
meaning set forth in 5 CFR 2635.102(l).
Spouse means an employee’s husband
or wife by lawful marriage, but does not
include an employee’s spouse if:
(1) The employee and the employee’s
spouse are separated;
(2) The employee and the employee’s
spouse live apart;
(3) There is an intention to end the
marriage or separate permanently; and
(4) The employee has no control over
the separated spouse’s securities.
Vested legal or beneficial interest
means a present right or title to
property, which carries with it an
existing right of alienation, even though
the right to possession or enjoyment
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may be postponed to some uncertain
time in the future. This includes a
future interest when one has a right,
defeasible or indefeasible, to immediate
possession or enjoyment of the property,
upon the ceasing of another’s interest.
■ 3. Revise § 9401.104 to read as
follows:
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§ 9401.104 Additional rules concerning
outside employment for covered
employees.
(a) Prohibited outside employment
with an entity supervised by the Bureau.
A covered employee shall not engage in
compensated outside employment for
an entity supervised by the Bureau or
for an officer, director, or employee of
such entity. For purposes of this section,
‘‘employment’’ has the same meaning as
set forth in § 9401.103(b).
(b) Use of professional licenses related
to real estate. A covered employee who
holds a license related to real estate,
mortgage brokerage, property appraisals,
or real property insurance is prohibited
from using such license for the
production of income. The DAEO, in
consultation with senior management in
the Division in which the employee
works, may grant a limited waiver to
this prohibition based on a written
finding that the specific transaction
which requires use of the license will
not create an appearance of loss of
impartiality or use of public office for
private gain.
(c) Definition of covered employee.
For purposes of this section, ‘‘covered
employee’’ means:
(1) An employee in the Division of
Supervision, Enforcement, and Fair
Lending;
(2) An employee serving in an
attorney position;
(3) An employee in the Office of
Research, serving as a section chief at
Bureau pay band 71 or above or as a
senior economist in the Compliance
Analytics and Policy Section;
(4) An employee serving in the Office
of Consumer Response in an
investigations position;
(5) An employee required to file a
Public Financial Disclosure Report
(OGE Form 278e) under 5 CFR part
2634; or
(6) Any other Bureau employee
specified in a Bureau order or directive
whose duties and responsibilities, as
determined by the DAEO, require
application of the prohibition on
outside employment contained in this
section to ensure public confidence that
the Bureau’s programs are conducted
impartially and objectively.
■ 4. Amend § 9401.105 by revising
paragraphs (a) introductory text, (a)(1),
(b)(1), and (b)(2) to read as follows:
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§ 9401.105 Additional rules concerning
outside employment for Bureau attorneys.
(a) Prohibited outside practice of law.
In addition to the prior approval
requirements under § 9401.103 and the
outside employment restrictions under
§ 9401.104, an employee serving in an
attorney position shall not engage in the
practice of law outside the employee’s
official Bureau duties that might require
the attorney to:
(1) Take a position that is or appears
to be in conflict with the interests of the
Bureau; or
*
*
*
*
*
(b) * * *
(1) In those matters in which the
attorney has participated personally and
substantially as a Government
employee; or
(2) In those matters which are the
subject of the attorney’s official
responsibility.
■ 5. Revise § 9401.106 to read as
follows:
§ 9401.106
Prohibited financial interests.
(a) Prohibited interests. Except as
permitted by this section, an employee
or an employee’s spouse or minor child
shall not own or control a security in:
(1) An entity supervised by the
Bureau; or
(2) A collective investment fund that
has a stated policy of concentrating its
investments in the financial services or
banking industry. A collective
investment fund includes, without
limitation, mutual funds, unit
investment trusts (UITs), exchange
traded funds (ETFs), real estate
investment trusts (REITs), and limited
partnerships.
(b) Exceptions. Interests prohibited in
paragraph (a) of this section do not
include the ownership or control of a
security in:
(1) Collective investment funds. A
publicly traded or publicly available
collective investment fund if:
(i) The fund does not have a stated
policy of concentrating its investments
in the financial services or banking
industry; and
(ii) Neither the employee nor the
employee’s spouse or minor child
exercises or has the ability to exercise
control over or selection of the financial
interests held by the fund.
(2) Diversified employee benefit plans.
A pension or other retirement fund,
trust, or plan established or maintained
by an employer or an employee
organization, or both, to provide its
participants with medical, disability,
death, unemployment, or vacation
benefits, training programs, day care
centers, scholarship funds, prepaid legal
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services, deferred income, or retirement
income (employee plan), provided:
(i) The employee plan does not have
a stated policy of concentrating its
investments in any industry, business,
single country other than the United
States, or bonds of a single State within
the United States;
(ii) The investments of the employee
plan are administered by an
independent trustee;
(iii) The employee plan’s trustee has
a written policy of varying the plan
investments;
(iv) Neither the employee nor the
employee’s spouse or minor child
participates in the selection of the
employee plan’s investments or
designates specific plan investments
(except for directing that contributions
be divided among several different
categories of investments, such as
stocks, bonds, or mutual funds, which
are available to plan participants); and
(v) The employee plan is not a profitsharing or stock bonus plan.
(3) Federal retirement and thrift
savings plans. Funds administered by
the Thrift Plan for Employees of the
Federal Reserve System, the Retirement
Plan for Employees of the Federal
Reserve System, the Thrift Savings Plan,
or a Federal government agency.
(4) State pension plans. A pension
plan established or maintained by a
State government or any political
subdivision of a State government for its
employees.
(c) Reporting and divestiture of
prohibited interests—(1) New
employees. Within 30 calendar days
from the start of employment with the
Bureau, an employee must notify the
DAEO in writing of a financial interest
prohibited under paragraph (a) of this
section that the employee or the
employee’s spouse or minor child
acquired prior to the start of the
employee’s employment with the
Bureau. The employee or the
employee’s spouse or minor child shall
divest prohibited securities within 90
days after the start of the employee’s
employment at the Bureau.
(2) Newly prohibited interest. Within
30 days after the Bureau updates and
internally publishes a new list of
entities supervised by the Bureau, an
employee who owns or controls, or
whose spouse or minor child owns or
controls, a security in an entity newly
added to that list must notify the DAEO
in writing. The employee or the
employee’s spouse or minor child shall
divest prohibited securities within 90
days after internal publication of the
new list.
(3) Interests acquired without specific
intent. If an employee or an employee’s
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spouse or minor child acquires a
financial interest prohibited under
paragraph (a) of this section as a result
of marriage, inheritance, or otherwise
without specific intent to acquire, the
employee must notify the DAEO in
writing within 30 days of the
acquisition. The employee or the
employee’s spouse or minor child shall
divest prohibited securities within 90
days of the acquisition.
(d) Disqualification and divestiture—
(1) Securities in entities supervised by
the Bureau. If an employee or an
employee’s spouse or minor child owns
or controls a security in an entity that
is prohibited under paragraph (a)(1) of
this section, the employee shall
immediately disqualify himself or
herself from participating in all
particular matters affecting that entity,
unless and until the security is divested
or the employee is granted a waiver
pursuant to paragraph (e) of this section
and the waiver includes an
authorization allowing the employee to
participate in such matters.
(2) Securities in collective investment
funds. If an employee or an employee’s
spouse or minor child owns or controls
a security in a collective investment
fund that is prohibited under paragraph
(a)(2) of this section, the employee shall
immediately disqualify himself or
herself from participating in all
particular matters affecting one or more
holdings of the collective investment
fund if the affected holding is invested
in the financial services or banking
industry, unless and until the collective
investment fund is divested or the
employee is granted a waiver pursuant
to paragraph (e) of this section and the
waiver includes an authorization
allowing the employee to participate in
such matters.
(e) Waivers. Upon request by the
employee, the DAEO in the DAEO’s sole
discretion has the authority to grant an
individual waiver under this paragraph.
The DAEO’s authority to grant an
individual waiver under this paragraph
may not be delegated to any person
except the Alternate DAEO. The DAEO,
in consultation with senior management
in the Division in which the employee
works, may issue a written waiver
permitting the employee or the
employee’s spouse or minor child to
own or control a particular security that
otherwise would be prohibited by this
section, after considering all relevant
factors. Relevant factors include,
without limitation, whether:
(1) Mitigating circumstances exist due
to the way the employee or the
employee’s spouse or minor child
acquired ownership or control of the
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security. Mitigating circumstances may
include without limitation:
(i) The employee or the employee’s
spouse or minor child acquired the
security through inheritance, merger,
acquisition, or other change in corporate
structure, or otherwise without specific
intent on the part of the employee or the
employee’s spouse or minor child; or
(ii) The employee’s spouse received
the security as part of a compensation
package in connection with
employment or prior to marriage to the
employee;
(2) The employee makes a prompt and
complete written disclosure of the
security to the DAEO;
(3) The disqualification of the
employee from participating in
particular matters pursuant to paragraph
(d) of this section, as specified in the
written waiver, would not unduly
interfere with the full performance of
the employee’s duties; and
(4) The granting of the waiver would
not unduly undermine the public’s
confidence in the impartiality and
objectivity with which:
(i) The employee performs the
employee’s official Bureau duties; and
(ii) The Division in which the
employee works executes its programs
and functions.
(f) Covered third party entities.
Immediately after becoming aware that
a covered third party entity owns or
controls a security that an employee
would be prohibited from owning or
controlling under paragraph (a) of this
section, the employee shall report the
interest in writing to the DAEO. The
DAEO may require the employee to
terminate the relationship with the
covered third party entity, disqualify
himself or herself from certain
particular matters, or take other action
as necessary to avoid a statutory
violation, a violation of the OGE
Standards, or the CFPB Ethics
Regulations, including an appearance of
misuse of position or loss of
impartiality. For purposes of this
paragraph, ‘‘covered third party entity’’
includes:
(1) A partnership in which the
employee or the employee’s spouse or
minor child is a general partner;
(2) A partnership or closely held
corporation in which the employee or
the employee’s spouse or minor child
individually or jointly holds more than
a 10 percent equity interest;
(3) A trust in which the employee or
the employee’s spouse or minor child
has a vested legal or beneficial interest;
(4) An investment club or similar
informal investment arrangement
between the employee or the employee’s
spouse or minor child, and others;
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(5) A qualified profit sharing,
retirement, or similar plan in which the
employee or the employee’s spouse or
minor child has an interest; or
(6) An entity in which the employee
or the employee’s spouse or minor child
individually or jointly holds more than
a 25 percent equity interest.
■ 6. Revise § 9401.107 to read as
follows:
§ 9401.107 Prohibition on acceptance of
credit or indebtedness on preferential terms
from an entity supervised by the Bureau.
An employee or the employee’s
spouse or minor child may not accept
credit from, become indebted to, or
enter into a financial relationship with
an entity supervised by the Bureau,
unless the credit, indebtedness, or other
financial relationship:
(a) Is offered on terms and conditions
no more favorable than those offered to
the general public; and
(b) Is not otherwise prohibited by law
or inconsistent with the OGE Standards
or the CFPB Ethics Regulations.
■ 7. Revise § 9401.108 to read as
follows:
§ 9401.108 Restrictions on seeking,
obtaining, or renegotiating credit or
indebtedness from an entity that is a party
or represents a party to a matter to which
an employee is assigned or may be
assigned.
(a) General rules regarding seeking,
obtaining, or renegotiating credit or
indebtedness—(1) Prohibition. While an
employee is assigned to participate in a
particular matter involving specific
parties, the employee or the employee’s
spouse or minor child shall not seek,
obtain, or renegotiate credit or
indebtedness with an entity that is a
party or represents a party to the matter.
This prohibition also applies to a
particular matter involving specific
parties pending at the Bureau in which
the employee is not currently
participating but of which the employee
is aware and believes it is likely that the
employee will participate.
(2) Cooling off period. The prohibition
in paragraph (a)(1) of this section
continues for two years after the
employee’s participation in the
particular matter has ended.
(b) Rules regarding credit or
indebtedness secured by principal
residence. Notwithstanding paragraph
(a) of this section, an employee or an
employee’s spouse or minor child may
seek, obtain, or renegotiate credit or
indebtedness secured by residential real
property with an entity, subject to the
following conditions:
(1) The residential real property is or
will be the principal residence of the
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employee or the employee’s spouse or
minor child;
(2) A minimum of three months have
passed since the end of the employee’s
participation in each particular matter
involving specific parties in which that
entity was a party or represented a
party;
(3) The employee is disqualified from
participating in particular matters
involving specific parties in which that
entity is a party or represents a party
while the employee or the employee’s
spouse or minor child is seeking,
obtaining, or renegotiating the credit or
indebtedness;
(4) The employee or the employee’s
spouse or minor child seeking,
obtaining, or negotiating the credit or
indebtedness must satisfy all financial
requirements generally applicable to all
applicants for the same type of credit or
indebtedness for residential real
property; and
(5) The credit or indebtedness is
obtained on terms and conditions no
more favorable than those offered to the
general public.
(c) Specific rules for employee’s
spouse and minor child. The
prohibitions in paragraphs (a) and (b) of
this section do not apply when the
employee’s spouse or minor child is
seeking, obtaining, or renegotiating
credit or indebtedness and:
(1) The credit or indebtedness is
supported only by the income or
independent means of the spouse or
minor child;
(2) The credit or indebtedness is
obtained on terms and conditions no
more favorable than those offered to the
general public; and
(3) The employee does not participate
in the negotiating for the credit or
indebtedness or serve as co-maker,
endorser or guarantor of the credit or
indebtedness.
(d) Disqualification requirement for
credit or indebtedness sought by person
related to an employee. An employee
shall disqualify himself or herself from
participating in a particular matter
involving specific parties as soon as the
employee learns that any of the
following persons are seeking,
obtaining, or renegotiating credit or
indebtedness with an entity that is a
party or represents a party to the matter:
(1) The employee’s spouse, domestic
partner, or dependent child;
(2) A partnership in which the
employee or the employee’s spouse,
domestic partner, or dependent child is
a general partner;
(3) A partnership or closely held
corporation in which the employee or
the employee’s spouse, domestic
partner, or dependent child individually
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15:35 Aug 01, 2017
Jkt 241001
or jointly owns or controls more than a
10 percent equity interest;
(4) A trust in which the employee or
the employee’s spouse, domestic
partner, or dependent child has a vested
legal or beneficial interest;
(5) An investment club or similar
informal investment arrangement
between the employee or the employee’s
spouse, domestic partner, or dependent
child, and others;
(6) A qualified profit sharing,
retirement, or similar plan in which the
employee or the employee’s spouse,
domestic partner, or dependent child
has an interest; or
(7) An entity in which the employee
or the employee’s spouse, domestic
partner, or dependent child individually
or jointly holds more than a 25 percent
equity interest.
(e) Exemptions. The following forms
of credit are exempted from the
prohibitions in paragraphs (a) and (b) of
this section and the disqualification
requirement in paragraph (d) of this
section, provided the credit is offered on
terms and conditions no more favorable
than those offered to the general public:
(1) Revolving consumer credit or
charge cards;
(2) Overdraft protection on checking
accounts and similar accounts; and
(3) The provision of telephone, cable,
gas, electricity, water, or other similar
utility services provided on credit (i.e.,
the service is provided before payment
is due such that consumers incur debt
as they use the service and receive
periodic bills for the services used).
(f) Waivers. The DAEO, after
consultation with senior management in
the Division in which the employee
works, may grant a written waiver from
the prohibition in paragraphs (a) or (b)
of this section or the disqualification
requirement in paragraph (d) of this
section, based on a determination that
participation in matters otherwise
prohibited by this section would not be
prohibited by law (18 U.S.C. 208) or
create an appearance of loss of
impartiality or use of public office for
private gain, and would not otherwise
be inconsistent with the OGE Standards
or the CFPB Ethics Regulations.
■ 8. Amend § 9401.109 by revising the
section heading, paragraphs (a)
introductory text, (a)(5) and (b)(1)
through (5) and adding paragraphs (b)(6)
and (7) to read as follows:
§ 9401.109 Disqualification of employees
from particular matters involving existing
creditors or lenders.
(a) Disqualification required. Absent
an authorization pursuant to paragraph
(d) of this section, an employee shall not
participate in a particular matter
PO 00000
Frm 00005
Fmt 4700
Sfmt 4700
35887
involving specific parties if the
employee is aware that any of the
following have credit with or are
indebted to an entity that is a party or
represents a party to the matter:
*
*
*
*
*
(5) A trust in which the employee or
the employee’s spouse, domestic
partner, or dependent child has a vested
legal or beneficial interest;
*
*
*
*
*
(b) * * *
(1) Revolving consumer credit or
charge cards;
(2) Overdraft protection on checking
accounts and similar accounts;
(3) Amortizing indebtedness on
consumer goods (e.g., automobiles);
(4) Automobile leases for primarily
personal (consumer) use vehicles;
(5) The provision of telephone, cable,
gas, electricity, water, or other similar
utility services provided on credit (i.e.,
the service is provided before payment
is due such that consumers incur debt
as they use the service and receive
periodic bills for the services used);
(6) Educational loans (e.g., student
loans; loans taken out by a parent or
guardian to pay for a child’s education
costs); and
(7) Loans on residential homes (e.g.,
home mortgages; home equity lines of
credit).
*
*
*
*
*
■ 9. Revise § 9401.110 to read as
follows:
§ 9401.110
Prohibited recommendations.
An employee shall not make
recommendations or suggestions,
directly or indirectly, concerning the
acquisition or sale or other divestiture of
a security in an entity supervised by the
Bureau, or an entity that is a party or
represents a party to a particular matter
involving specific parties to which the
employee is assigned.
■ 10. Revise § 9401.111 to read as
follows:
§ 9401.111 Restriction on participating in
matters involving covered entities.
(a) Disqualification required. Absent
an authorization pursuant to paragraph
(c) of this section, an employee shall not
participate in a particular matter
involving specific parties if a covered
entity is a party or represents a party to
the matter.
(b) ‘‘Covered entity’’ defined. For
purposes of this section, a ‘‘covered
entity’’ includes:
(1) Any person for whom the
employee is serving or seeking to serve,
or has served within the last year, as
officer, director, trustee, general partner,
agent, attorney, consultant, contractor,
or employee; or
E:\FR\FM\02AUR1.SGM
02AUR1
35888
Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 / Rules and Regulations
(2) Any person for whom the
employee is aware the employee’s
´
spouse, domestic partner, fiancé, child,
parent, sibling, stepfather, stepmother,
stepson, stepdaughter, stepbrother,
stepsister, half-brother, half-sister, or
member of the employee’s household is
serving or seeking to serve as an officer,
director, trustee, general partner, agent,
attorney, consultant, contractor, or
employee.
(c) Waivers. The DAEO may authorize
the employee to participate in a matter
that would require disqualification
under paragraph (a) of this section,
using the authorization process set forth
in 5 CFR 2635.502(d) of the OGE
Standards. The DAEO will consult with
senior management in the Division in
which the employee works before
issuing such an authorization.
Dated: July 17, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial
Protection.
Approved:
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.
[FR Doc. 2017–15597 Filed 8–1–17; 8:45 am]
BILLING CODE 4810–AM–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2017–0417; Directorate
Identifier 2017–CE–008–AD; Amendment
39–18975; AD 2017–15–15]
RIN 2120–AA64
Airworthiness Directives; SOCATA
Airplanes
Discussion
Federal Aviation
Administration (FAA), Department of
Transportation (DOT).
ACTION: Final rule.
AGENCY:
We are superseding
Airworthiness Directive (AD) 2002–19–
01 for SOCATA Model TBM 700
airplanes. This AD results from
mandatory continuing airworthiness
information (MCAI) issued by an
aviation authority of another country to
identify and correct an unsafe condition
on an aviation product. The MCAI
describes the unsafe condition as the
flight control wheel traveling beyond
normal roll control limits and jamming
in a position that could cause loss of
control. We are issuing this AD to
require actions to address the unsafe
condition on these products.
DATES: This AD is effective September 6,
2017.
jstallworth on DSKBBY8HB2PROD with RULES
SUMMARY:
VerDate Sep<11>2014
15:35 Aug 01, 2017
Jkt 241001
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in the AD
as of September 6, 2017.
The Director of the Federal Register
approved the incorporation by reference
of a certain other publication listed in
this AD as of October 29, 2002 (67 FR
59137; September 20, 2002).
ADDRESSES: You may examine the AD
docket on the Internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2017–
0417; or in person at the Docket
Management Facility, U.S. Department
of Transportation, Docket Operations,
M–30, West Building Ground Floor,
Room W12–140, 1200 New Jersey
Avenue SE., Washington, DC 20590.
For service information identified in
this AD, contact SOCATA, Direction des
services, 65921 Tarbes Cedex 9, France;
phone: +33 (0) 5 62 41 73 00; fax: +33
(0) 5 62 41 76 54; email: info@
socata.daher.com; Internet: https://
www.mysocata.com/login/accueil.php.
You may view this referenced service
information at the FAA, Small Airplane
Directorate, 901 Locust, Kansas City,
Missouri 64106. For information on the
availability of this material at the FAA,
call (816) 329–4148. It is also available
on the Internet at https://
www.regulations.gov by searching for
Docket No. FAA–2017–0417.
FOR FURTHER INFORMATION CONTACT:
Albert Mercado, Aerospace Engineer,
901 Locust, Room 301, Kansas City,
Missouri 64106; telephone: (816) 329–
4119; fax: (816) 329–4090; email:
albert.mercado@faa.gov.
SUPPLEMENTARY INFORMATION:
We issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would
apply to SOCATA Model TBM 700
airplanes. That NPRM was published in
the Federal Register on May 8, 2017 (82
FR 21328), and proposed to supersede
AD 2002–19–01, Amendment 39–12881
(67 FR 59137; September 20, 2002) (‘‘AD
2002–19–01’’).
The NPRM proposed to correct an
unsafe condition for the specified
products and was based on mandatory
continuing airworthiness information
(MCAI) originated by an aviation
authority of another country. The MCAI
states that:
An event occurred in 2001 on an in-service
aeroplane where, during a pre-flight check of
the flight controls, the pilot control wheel
jammed in full nose up and full left position
after having exceeded the control stop of roll.
This condition, if not corrected, could lead
to reduced control of the aeroplane.
PO 00000
Frm 00006
Fmt 4700
Sfmt 4700
Prompted by these findings, SOCATA
issued Service Bulletin (SB) 70–095–27 to
provide inspection instructions.
To address this unsafe condition, DGAC
France issued AD 2001–582(A) to require
repetitive inspections of the flight control
system after any maintenance operation on
flight controls. That AD was later revised to
update the list of affected aeroplane MSN.
Since DGAC France AD 2001–582(A) R1
was issued, SOCATA issued Revision 2 of SB
70–095–27 to provide instructions for
replacement of the rivets in the roll primary
stops as a terminating action for the
repetitive inspections.
For the reasons described above, this
[EASA] AD, which supersedes DGAC France
AD 2001–582(A) R1, requires replacement of
the rivets in the roll primary stops of the
flight control wheels at the next maintenance
operation on flight controls.
The MCAI can be found in the AD
docket on the Internet at: https://
www.regulations.gov/
document?D=FAA-2017-0417-0002.
Comments
We gave the public the opportunity to
participate in developing this AD. We
received no comments on the NPRM or
on the determination of the cost to the
public.
Conclusion
We reviewed the relevant data and
determined that air safety and the
public interest require adopting the AD
as proposed except for minor editorial
changes. We have determined that these
minor changes:
• Are consistent with the intent that
was proposed in the NPRM for
correcting the unsafe condition; and
• Do not add any additional burden
upon the public than was already
proposed in the NPRM.
Related Service Information Under 1
CFR 51
We reviewed DAHER SOCATA
Mandatory Service Bulletin SB 70–095,
Revision 2, dated October 2016, which
describes procedures for replacement of
the flight control wheel primary stop
rivets. We also reviewed EADS
SOCATA Recommended Service
Bulletin SB 70–114, dated December
2004, which describes procedures for
installation of roll control emergency
stops on the flight control wheel. This
service information is reasonably
available because the interested parties
have access to it through their normal
course of business or by the means
identified in the ADDRESSES section of
the AD.
Differences Between This AD and the
Service Information
DAHER SOCATA Mandatory Service
Bulletin SB 70–095, Revision 2, dated
E:\FR\FM\02AUR1.SGM
02AUR1
]]>Agencies
[Federal Register Volume 82, Number 147 (Wednesday, August 2, 2017)]
[Rules and Regulations]
[Pages 35883-35888]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15597]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 82, No. 147 / Wednesday, August 2, 2017 /
Rules and Regulations
[[Page 35883]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
5 CFR Part 9401
[Docket No. CFPB-2016-0050]
RIN 3209-AA15
Supplemental Standards of Ethical Conduct for Employees of the
Bureau of Consumer Financial Protection
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Consumer Financial Protection (CFPB or Bureau),
with the concurrence of the Office of Government Ethics (OGE), is
issuing a final rule amending the Supplemental Standards of Ethical
Conduct for Employees of the Bureau of Consumer Financial Protection
(CFPB Ethics Regulations) involving: Outside employment for covered
employees; Bureau employees' ownership or control of certain
securities; restrictions on seeking, obtaining, or renegotiating credit
or indebtedness; disqualification requirements based on existing credit
or indebtedness; and restrictions on participating in matters involving
covered entities. The final rule also clarifies and makes minor
revisions to certain definitions.
DATES: This final rule is effective September 1, 2017.
FOR FURTHER INFORMATION CONTACT: Amber Vail, Senior Ethics Counsel, at
(202) 435-7305 or Amy Mertz Brown, Alternate Designated Agency Ethics
Official, at (202) 435-7256 at the Legal Division, Consumer Financial
Protection Bureau.
SUPPLEMENTARY INFORMATION:
I. Background
On January 10, 2017, the Bureau, with OGE's concurrence, published
a proposed rule in the Federal Register, 82 FR 2921, Jan. 10, 2017,
proposing to amend the CFPB Ethics Regulations. The proposed rule
provided a 30-day comment period, which ended on February 9, 2017. The
Bureau did not receive any comments. The rationale for the proposed
rule, which the Bureau is now adopting as final, is explained in the
preamble at: https://www.federalregister.gov/documents/2017/01/10/2016-31596/supplemental-standards-of-ethical-conduct-for-employees-of-the-bureau-of-consumer-financial.
The Bureau has made six technical changes in the final rule that
are not intended to change the substantive meaning of the rule. First,
in 5 CFR 9401.102, the Bureau removed the phrase ``on a mortgage'' from
the definition of ``indebted to an entity'' to clarify that the term
includes any type of servicer to whom payments are made. Second, the
Bureau replaced the phrase ``he or she'' with the term ``employee'' in
the definition of ``participate'' in 5 CFR 9401.102. Third, the Bureau
inserted the phrase ``or indebtedness'' in the section heading of 5 CFR
9401.108 and the subsection heading in Sec. 9401.108(d) to highlight
that the restrictions in this section apply to both credit and
indebtedness. Fourth, the Bureau added the phrase ``or lenders'' to the
section heading of 5 CFR 9401.109 to clarify that the restrictions in
this section apply to both creditors and lenders. The Bureau added the
phrase to ensure that the language in the section heading is parallel
to the substantive language regarding credit or indebtedness in the
text of that section. The revision does not change the substance of the
rule. Fifth, the Bureau made a grammatical correction by changing the
word ``with'' to ``within'' in 5 CFR 9401.111(b)(1). Finally, in
several places within the regulation, the Bureau revised the phrase
``is or represents a party'' to read ``is a party or represents a
party.'' This revision is intended to clarify that the regulation
applies when an entity is a party, as well as when an entity is
representing a party in a particular matter involving specific parties.
II. Matters of Regulatory Procedure
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., as amended by
the Small Business Regulatory Enforcement Fairness Act of 1996 (the
RFA), requires each agency to consider the potential impact of its
regulations on small entities, including small businesses, small
governmental units, and small not-for-profit organizations, unless the
head of the agency certifies that the rules will not have a significant
economic impact on a substantial number of small entities. The Director
of the Bureau so certifies. The rule does not impose any obligations or
standards of conduct for purposes of analysis under the RFA, and it
therefore does not give rise to a regulatory compliance burden for
small entities.
Paperwork Reduction Act
The Bureau has determined that this rule does not impose any new
recordkeeping, reporting, or disclosure requirements on members of the
public that would be collections of information requiring approval
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
List of Subjects in 5 CFR Part 9401
Conflict of interests, Government employees.
Authority and Issuance
For the reasons set forth in the preamble, the Bureau, in
concurrence with OGE, is amending part 9401 of title 5 of the Code of
Federal Regulations as follows:
PART 9401--SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES
OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION
0
1. The authority citation for part 9401 is revised to read as follows:
Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government
Act of 1978); E.O. 12674, 54 FR 15159 (April 12, 1989); 3 CFR, 1898
Comp., p.215, as modified by E.O. 12731, 55 FR 42547 (October 17,
1990); 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.403, 2635.502
and 2635.803.
0
2. Revise Sec. 9401.102 to read as follows:
Sec. 9401.102 Definitions.
For purposes of this part:
CFPB Ethics Regulations means the supplemental ethics standards set
forth in this part.
Control means the possession, direct or indirect, of the power or
authority to manage, direct, or oversee.
Credit has the meaning set forth in 12 U.S.C. 5481(7) and as
further defined in
[[Page 35884]]
regulations promulgated by the Bureau to implement that statute. A
person may have credit without any outstanding balance owed.
Dependent child has the meaning set forth in 5 CFR 2634.105(d). It
includes an employee's son, daughter, stepson, or stepdaughter if:
(1) Unmarried, under the age of 21, and living in the employee's
household; or
(2) Claimed as a ``dependent'' on the employee's income tax return.
Designated Agency Ethics Official (DAEO) means the official within
the Bureau that the Director has appointed to coordinate and manage the
ethics program at the Bureau, under 5 CFR 2638.104(a). For purposes of
this part, the term ``DAEO'' also includes the Alternate DAEO appointed
under 5 CFR 2638.104(d), and a designee of the DAEO or Alternate DAEO
unless a particular provision says an authority is reserved to the
DAEO.
Director means the Director of the Bureau.
Domestic partner means a person with whom a Bureau employee:
(1) Has a close and committed personal relationship and both
parties are at least 18 years of age, are each other's sole domestic
partner and intend to remain in the relationship indefinitely, and
neither is married to, in a civil union with, or partnered with any
other spouse or domestic partner;
(2) Is not related by blood in a manner that would bar marriage
under the laws of the jurisdiction in which the employee resides;
(3) Is in a financially interdependent relationship in which both
agree to be responsible for each other's common welfare and share in
financial obligations; and
(4) Has shared for at least six months the same regular and
permanent residence in a committed relationship and both parties intend
to do so indefinitely, or would maintain a common residence but for an
assignment abroad or other employment-related, financial, or similar
obstacle.
Employee means an employee of the Bureau, other than a special
Government employee.
Entity supervised by the Bureau means a person that is subject to
the Bureau's supervision authority pursuant to 12 U.S.C. 5514(a)(1) or
5515(a) and in regulations promulgated thereunder, as identified on a
list to be maintained by the Bureau.
Indebted or indebtedness means a legal obligation under which an
individual or borrower received money or assets on credit, and
currently owes payment.
Indebted to an entity means an obligation to make payments to an
entity as a result of an indebtedness, whether originally made with
that entity or with another entity. This includes without limitation, a
servicer to whom payments are made.
OGE Standards mean the Standards of Ethical Conduct for Employees
of the Executive Branch contained in 5 CFR part 2635.
Participate means personal and substantial participation and has
the meaning set forth in 5 CFR 2635.402(b)(4). An employee participates
when, for example, the employee makes a decision, gives approval or
disapproval, renders advice, provides a recommendation, conducts an
investigation or examination, or takes an official action in a
particular matter, and such involvement is of significance to the
matter. It requires more than official responsibility, knowledge,
perfunctory involvement, or involvement on an administrative or
peripheral issue.
Particular matter has the meaning set forth in 5 CFR
2635.402(b)(3). The term includes a matter that involves deliberation,
decision, or action and is focused upon the interests of specific
persons or a discrete and identifiable class of persons. It may include
governmental action such as legislation, regulations, or policy-making
that is narrowly focused on the interests of a discrete and
identifiable class of persons.
Particular matter involving specific parties has the meaning set
forth in 5 CFR 2641.201(h). Such a matter typically involves a specific
proceeding affecting the legal rights of the parties or an isolatable
transaction or related set of transactions between identified parties.
The term includes without limitation, a contract, audit, enforcement
action, examination, investigation, litigation proceeding, or request
for a ruling.
Person has the same meaning set forth in 5 CFR 2635.102(k). It
includes without limitation, an individual, corporation and
subsidiaries it controls, company, association, firm, partnership,
society, joint stock company, or any other organization or institution.
Practice of law means the provision of legal advice or services
where there is a client relationship of trust or reliance. One is
presumed to be practicing law when engaging in any of the following
conduct on behalf of another:
(1) Preparing any legal document, including any deeds, mortgages,
assignments, discharges, leases, trust instruments, or any other
instruments intended to affect interests in real or personal property,
wills, codicils, instruments intended to affect the disposition of
property of decedents' estates, other instruments intended to affect or
secure legal rights, and contracts except routine agreements incidental
to a regular course of business;
(2) Preparing or expressing legal opinions;
(3) Appearing or acting as an attorney in any tribunal;
(4) Preparing any claims, demands or pleadings of any kind, or any
written documents containing legal argument or interpretation of law,
for filing in any court, administrative agency, or other tribunal;
(5) Providing advice or counsel as to how any of the activities
described in paragraphs (1) through (4) of this definition might be
done, or whether they were done, in accordance with applicable law; or
(6) Furnishing an attorney or attorneys, or other persons, to
render the services described in paragraphs (1) through (5) of this
definition.
Security means an interest in debt or equity instruments. The term
includes without limitation, secured and unsecured bonds, debentures,
notes, securitized assets, commercial papers, and preferred and common
stock. The term encompasses both current and contingent ownership
interests; a beneficial or legal interest derived from a trust; a right
to acquire or dispose of any long or short position in debt or equity
interests; interests convertible into debt or equity interests; and
options, rights, warrants, puts, calls, straddles, derivatives, and
other similar interests. It does not include deposits; credit union
shares; a future interest created by someone other than the employee or
the employee's spouse or dependent child; or a right as a beneficiary
of an estate that has not been settled.
Special Government employee has the meaning set forth in 5 CFR
2635.102(l).
Spouse means an employee's husband or wife by lawful marriage, but
does not include an employee's spouse if:
(1) The employee and the employee's spouse are separated;
(2) The employee and the employee's spouse live apart;
(3) There is an intention to end the marriage or separate
permanently; and
(4) The employee has no control over the separated spouse's
securities.
Vested legal or beneficial interest means a present right or title
to property, which carries with it an existing right of alienation,
even though the right to possession or enjoyment
[[Page 35885]]
may be postponed to some uncertain time in the future. This includes a
future interest when one has a right, defeasible or indefeasible, to
immediate possession or enjoyment of the property, upon the ceasing of
another's interest.
0
3. Revise Sec. 9401.104 to read as follows:
Sec. 9401.104 Additional rules concerning outside employment for
covered employees.
(a) Prohibited outside employment with an entity supervised by the
Bureau. A covered employee shall not engage in compensated outside
employment for an entity supervised by the Bureau or for an officer,
director, or employee of such entity. For purposes of this section,
``employment'' has the same meaning as set forth in Sec. 9401.103(b).
(b) Use of professional licenses related to real estate. A covered
employee who holds a license related to real estate, mortgage
brokerage, property appraisals, or real property insurance is
prohibited from using such license for the production of income. The
DAEO, in consultation with senior management in the Division in which
the employee works, may grant a limited waiver to this prohibition
based on a written finding that the specific transaction which requires
use of the license will not create an appearance of loss of
impartiality or use of public office for private gain.
(c) Definition of covered employee. For purposes of this section,
``covered employee'' means:
(1) An employee in the Division of Supervision, Enforcement, and
Fair Lending;
(2) An employee serving in an attorney position;
(3) An employee in the Office of Research, serving as a section
chief at Bureau pay band 71 or above or as a senior economist in the
Compliance Analytics and Policy Section;
(4) An employee serving in the Office of Consumer Response in an
investigations position;
(5) An employee required to file a Public Financial Disclosure
Report (OGE Form 278e) under 5 CFR part 2634; or
(6) Any other Bureau employee specified in a Bureau order or
directive whose duties and responsibilities, as determined by the DAEO,
require application of the prohibition on outside employment contained
in this section to ensure public confidence that the Bureau's programs
are conducted impartially and objectively.
0
4. Amend Sec. 9401.105 by revising paragraphs (a) introductory text,
(a)(1), (b)(1), and (b)(2) to read as follows:
Sec. 9401.105 Additional rules concerning outside employment for
Bureau attorneys.
(a) Prohibited outside practice of law. In addition to the prior
approval requirements under Sec. 9401.103 and the outside employment
restrictions under Sec. 9401.104, an employee serving in an attorney
position shall not engage in the practice of law outside the employee's
official Bureau duties that might require the attorney to:
(1) Take a position that is or appears to be in conflict with the
interests of the Bureau; or
* * * * *
(b) * * *
(1) In those matters in which the attorney has participated
personally and substantially as a Government employee; or
(2) In those matters which are the subject of the attorney's
official responsibility.
0
5. Revise Sec. 9401.106 to read as follows:
Sec. 9401.106 Prohibited financial interests.
(a) Prohibited interests. Except as permitted by this section, an
employee or an employee's spouse or minor child shall not own or
control a security in:
(1) An entity supervised by the Bureau; or
(2) A collective investment fund that has a stated policy of
concentrating its investments in the financial services or banking
industry. A collective investment fund includes, without limitation,
mutual funds, unit investment trusts (UITs), exchange traded funds
(ETFs), real estate investment trusts (REITs), and limited
partnerships.
(b) Exceptions. Interests prohibited in paragraph (a) of this
section do not include the ownership or control of a security in:
(1) Collective investment funds. A publicly traded or publicly
available collective investment fund if:
(i) The fund does not have a stated policy of concentrating its
investments in the financial services or banking industry; and
(ii) Neither the employee nor the employee's spouse or minor child
exercises or has the ability to exercise control over or selection of
the financial interests held by the fund.
(2) Diversified employee benefit plans. A pension or other
retirement fund, trust, or plan established or maintained by an
employer or an employee organization, or both, to provide its
participants with medical, disability, death, unemployment, or vacation
benefits, training programs, day care centers, scholarship funds,
prepaid legal services, deferred income, or retirement income (employee
plan), provided:
(i) The employee plan does not have a stated policy of
concentrating its investments in any industry, business, single country
other than the United States, or bonds of a single State within the
United States;
(ii) The investments of the employee plan are administered by an
independent trustee;
(iii) The employee plan's trustee has a written policy of varying
the plan investments;
(iv) Neither the employee nor the employee's spouse or minor child
participates in the selection of the employee plan's investments or
designates specific plan investments (except for directing that
contributions be divided among several different categories of
investments, such as stocks, bonds, or mutual funds, which are
available to plan participants); and
(v) The employee plan is not a profit-sharing or stock bonus plan.
(3) Federal retirement and thrift savings plans. Funds administered
by the Thrift Plan for Employees of the Federal Reserve System, the
Retirement Plan for Employees of the Federal Reserve System, the Thrift
Savings Plan, or a Federal government agency.
(4) State pension plans. A pension plan established or maintained
by a State government or any political subdivision of a State
government for its employees.
(c) Reporting and divestiture of prohibited interests--(1) New
employees. Within 30 calendar days from the start of employment with
the Bureau, an employee must notify the DAEO in writing of a financial
interest prohibited under paragraph (a) of this section that the
employee or the employee's spouse or minor child acquired prior to the
start of the employee's employment with the Bureau. The employee or the
employee's spouse or minor child shall divest prohibited securities
within 90 days after the start of the employee's employment at the
Bureau.
(2) Newly prohibited interest. Within 30 days after the Bureau
updates and internally publishes a new list of entities supervised by
the Bureau, an employee who owns or controls, or whose spouse or minor
child owns or controls, a security in an entity newly added to that
list must notify the DAEO in writing. The employee or the employee's
spouse or minor child shall divest prohibited securities within 90 days
after internal publication of the new list.
(3) Interests acquired without specific intent. If an employee or
an employee's
[[Page 35886]]
spouse or minor child acquires a financial interest prohibited under
paragraph (a) of this section as a result of marriage, inheritance, or
otherwise without specific intent to acquire, the employee must notify
the DAEO in writing within 30 days of the acquisition. The employee or
the employee's spouse or minor child shall divest prohibited securities
within 90 days of the acquisition.
(d) Disqualification and divestiture--(1) Securities in entities
supervised by the Bureau. If an employee or an employee's spouse or
minor child owns or controls a security in an entity that is prohibited
under paragraph (a)(1) of this section, the employee shall immediately
disqualify himself or herself from participating in all particular
matters affecting that entity, unless and until the security is
divested or the employee is granted a waiver pursuant to paragraph (e)
of this section and the waiver includes an authorization allowing the
employee to participate in such matters.
(2) Securities in collective investment funds. If an employee or an
employee's spouse or minor child owns or controls a security in a
collective investment fund that is prohibited under paragraph (a)(2) of
this section, the employee shall immediately disqualify himself or
herself from participating in all particular matters affecting one or
more holdings of the collective investment fund if the affected holding
is invested in the financial services or banking industry, unless and
until the collective investment fund is divested or the employee is
granted a waiver pursuant to paragraph (e) of this section and the
waiver includes an authorization allowing the employee to participate
in such matters.
(e) Waivers. Upon request by the employee, the DAEO in the DAEO's
sole discretion has the authority to grant an individual waiver under
this paragraph. The DAEO's authority to grant an individual waiver
under this paragraph may not be delegated to any person except the
Alternate DAEO. The DAEO, in consultation with senior management in the
Division in which the employee works, may issue a written waiver
permitting the employee or the employee's spouse or minor child to own
or control a particular security that otherwise would be prohibited by
this section, after considering all relevant factors. Relevant factors
include, without limitation, whether:
(1) Mitigating circumstances exist due to the way the employee or
the employee's spouse or minor child acquired ownership or control of
the security. Mitigating circumstances may include without limitation:
(i) The employee or the employee's spouse or minor child acquired
the security through inheritance, merger, acquisition, or other change
in corporate structure, or otherwise without specific intent on the
part of the employee or the employee's spouse or minor child; or
(ii) The employee's spouse received the security as part of a
compensation package in connection with employment or prior to marriage
to the employee;
(2) The employee makes a prompt and complete written disclosure of
the security to the DAEO;
(3) The disqualification of the employee from participating in
particular matters pursuant to paragraph (d) of this section, as
specified in the written waiver, would not unduly interfere with the
full performance of the employee's duties; and
(4) The granting of the waiver would not unduly undermine the
public's confidence in the impartiality and objectivity with which:
(i) The employee performs the employee's official Bureau duties;
and
(ii) The Division in which the employee works executes its programs
and functions.
(f) Covered third party entities. Immediately after becoming aware
that a covered third party entity owns or controls a security that an
employee would be prohibited from owning or controlling under paragraph
(a) of this section, the employee shall report the interest in writing
to the DAEO. The DAEO may require the employee to terminate the
relationship with the covered third party entity, disqualify himself or
herself from certain particular matters, or take other action as
necessary to avoid a statutory violation, a violation of the OGE
Standards, or the CFPB Ethics Regulations, including an appearance of
misuse of position or loss of impartiality. For purposes of this
paragraph, ``covered third party entity'' includes:
(1) A partnership in which the employee or the employee's spouse or
minor child is a general partner;
(2) A partnership or closely held corporation in which the employee
or the employee's spouse or minor child individually or jointly holds
more than a 10 percent equity interest;
(3) A trust in which the employee or the employee's spouse or minor
child has a vested legal or beneficial interest;
(4) An investment club or similar informal investment arrangement
between the employee or the employee's spouse or minor child, and
others;
(5) A qualified profit sharing, retirement, or similar plan in
which the employee or the employee's spouse or minor child has an
interest; or
(6) An entity in which the employee or the employee's spouse or
minor child individually or jointly holds more than a 25 percent equity
interest.
0
6. Revise Sec. 9401.107 to read as follows:
Sec. 9401.107 Prohibition on acceptance of credit or indebtedness on
preferential terms from an entity supervised by the Bureau.
An employee or the employee's spouse or minor child may not accept
credit from, become indebted to, or enter into a financial relationship
with an entity supervised by the Bureau, unless the credit,
indebtedness, or other financial relationship:
(a) Is offered on terms and conditions no more favorable than those
offered to the general public; and
(b) Is not otherwise prohibited by law or inconsistent with the OGE
Standards or the CFPB Ethics Regulations.
0
7. Revise Sec. 9401.108 to read as follows:
Sec. 9401.108 Restrictions on seeking, obtaining, or renegotiating
credit or indebtedness from an entity that is a party or represents a
party to a matter to which an employee is assigned or may be assigned.
(a) General rules regarding seeking, obtaining, or renegotiating
credit or indebtedness--(1) Prohibition. While an employee is assigned
to participate in a particular matter involving specific parties, the
employee or the employee's spouse or minor child shall not seek,
obtain, or renegotiate credit or indebtedness with an entity that is a
party or represents a party to the matter. This prohibition also
applies to a particular matter involving specific parties pending at
the Bureau in which the employee is not currently participating but of
which the employee is aware and believes it is likely that the employee
will participate.
(2) Cooling off period. The prohibition in paragraph (a)(1) of this
section continues for two years after the employee's participation in
the particular matter has ended.
(b) Rules regarding credit or indebtedness secured by principal
residence. Notwithstanding paragraph (a) of this section, an employee
or an employee's spouse or minor child may seek, obtain, or renegotiate
credit or indebtedness secured by residential real property with an
entity, subject to the following conditions:
(1) The residential real property is or will be the principal
residence of the
[[Page 35887]]
employee or the employee's spouse or minor child;
(2) A minimum of three months have passed since the end of the
employee's participation in each particular matter involving specific
parties in which that entity was a party or represented a party;
(3) The employee is disqualified from participating in particular
matters involving specific parties in which that entity is a party or
represents a party while the employee or the employee's spouse or minor
child is seeking, obtaining, or renegotiating the credit or
indebtedness;
(4) The employee or the employee's spouse or minor child seeking,
obtaining, or negotiating the credit or indebtedness must satisfy all
financial requirements generally applicable to all applicants for the
same type of credit or indebtedness for residential real property; and
(5) The credit or indebtedness is obtained on terms and conditions
no more favorable than those offered to the general public.
(c) Specific rules for employee's spouse and minor child. The
prohibitions in paragraphs (a) and (b) of this section do not apply
when the employee's spouse or minor child is seeking, obtaining, or
renegotiating credit or indebtedness and:
(1) The credit or indebtedness is supported only by the income or
independent means of the spouse or minor child;
(2) The credit or indebtedness is obtained on terms and conditions
no more favorable than those offered to the general public; and
(3) The employee does not participate in the negotiating for the
credit or indebtedness or serve as co-maker, endorser or guarantor of
the credit or indebtedness.
(d) Disqualification requirement for credit or indebtedness sought
by person related to an employee. An employee shall disqualify himself
or herself from participating in a particular matter involving specific
parties as soon as the employee learns that any of the following
persons are seeking, obtaining, or renegotiating credit or indebtedness
with an entity that is a party or represents a party to the matter:
(1) The employee's spouse, domestic partner, or dependent child;
(2) A partnership in which the employee or the employee's spouse,
domestic partner, or dependent child is a general partner;
(3) A partnership or closely held corporation in which the employee
or the employee's spouse, domestic partner, or dependent child
individually or jointly owns or controls more than a 10 percent equity
interest;
(4) A trust in which the employee or the employee's spouse,
domestic partner, or dependent child has a vested legal or beneficial
interest;
(5) An investment club or similar informal investment arrangement
between the employee or the employee's spouse, domestic partner, or
dependent child, and others;
(6) A qualified profit sharing, retirement, or similar plan in
which the employee or the employee's spouse, domestic partner, or
dependent child has an interest; or
(7) An entity in which the employee or the employee's spouse,
domestic partner, or dependent child individually or jointly holds more
than a 25 percent equity interest.
(e) Exemptions. The following forms of credit are exempted from the
prohibitions in paragraphs (a) and (b) of this section and the
disqualification requirement in paragraph (d) of this section, provided
the credit is offered on terms and conditions no more favorable than
those offered to the general public:
(1) Revolving consumer credit or charge cards;
(2) Overdraft protection on checking accounts and similar accounts;
and
(3) The provision of telephone, cable, gas, electricity, water, or
other similar utility services provided on credit (i.e., the service is
provided before payment is due such that consumers incur debt as they
use the service and receive periodic bills for the services used).
(f) Waivers. The DAEO, after consultation with senior management in
the Division in which the employee works, may grant a written waiver
from the prohibition in paragraphs (a) or (b) of this section or the
disqualification requirement in paragraph (d) of this section, based on
a determination that participation in matters otherwise prohibited by
this section would not be prohibited by law (18 U.S.C. 208) or create
an appearance of loss of impartiality or use of public office for
private gain, and would not otherwise be inconsistent with the OGE
Standards or the CFPB Ethics Regulations.
0
8. Amend Sec. 9401.109 by revising the section heading, paragraphs (a)
introductory text, (a)(5) and (b)(1) through (5) and adding paragraphs
(b)(6) and (7) to read as follows:
Sec. 9401.109 Disqualification of employees from particular matters
involving existing creditors or lenders.
(a) Disqualification required. Absent an authorization pursuant to
paragraph (d) of this section, an employee shall not participate in a
particular matter involving specific parties if the employee is aware
that any of the following have credit with or are indebted to an entity
that is a party or represents a party to the matter:
* * * * *
(5) A trust in which the employee or the employee's spouse,
domestic partner, or dependent child has a vested legal or beneficial
interest;
* * * * *
(b) * * *
(1) Revolving consumer credit or charge cards;
(2) Overdraft protection on checking accounts and similar accounts;
(3) Amortizing indebtedness on consumer goods (e.g., automobiles);
(4) Automobile leases for primarily personal (consumer) use
vehicles;
(5) The provision of telephone, cable, gas, electricity, water, or
other similar utility services provided on credit (i.e., the service is
provided before payment is due such that consumers incur debt as they
use the service and receive periodic bills for the services used);
(6) Educational loans (e.g., student loans; loans taken out by a
parent or guardian to pay for a child's education costs); and
(7) Loans on residential homes (e.g., home mortgages; home equity
lines of credit).
* * * * *
0
9. Revise Sec. 9401.110 to read as follows:
Sec. 9401.110 Prohibited recommendations.
An employee shall not make recommendations or suggestions, directly
or indirectly, concerning the acquisition or sale or other divestiture
of a security in an entity supervised by the Bureau, or an entity that
is a party or represents a party to a particular matter involving
specific parties to which the employee is assigned.
0
10. Revise Sec. 9401.111 to read as follows:
Sec. 9401.111 Restriction on participating in matters involving
covered entities.
(a) Disqualification required. Absent an authorization pursuant to
paragraph (c) of this section, an employee shall not participate in a
particular matter involving specific parties if a covered entity is a
party or represents a party to the matter.
(b) ``Covered entity'' defined. For purposes of this section, a
``covered entity'' includes:
(1) Any person for whom the employee is serving or seeking to
serve, or has served within the last year, as officer, director,
trustee, general partner, agent, attorney, consultant, contractor, or
employee; or
[[Page 35888]]
(2) Any person for whom the employee is aware the employee's
spouse, domestic partner, fiancé, child, parent, sibling,
stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister,
half-brother, half-sister, or member of the employee's household is
serving or seeking to serve as an officer, director, trustee, general
partner, agent, attorney, consultant, contractor, or employee.
(c) Waivers. The DAEO may authorize the employee to participate in
a matter that would require disqualification under paragraph (a) of
this section, using the authorization process set forth in 5 CFR
2635.502(d) of the OGE Standards. The DAEO will consult with senior
management in the Division in which the employee works before issuing
such an authorization.
Dated: July 17, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
Approved:
Walter M. Shaub, Jr.,
Director, Office of Government Ethics.
[FR Doc. 2017-15597 Filed 8-1-17; 8:45 am]
BILLING CODE 4810-AM-P
