Streamlining Inherited Regulations, 75825-75829 [2011-31030]

Download as PDF Federal Register / Vol. 76, No. 233 / Monday, December 5, 2011 / Proposed Rules Authority: 7 U.S.C. 450, 1901–1906; 21 U.S.C. 451–470, 601–695; 7 CFR 2.18, 2.53. 19. In § 424.21, revise footnote 3 in the table in paragraph (c) to read as follows: § 424.21 Use of food ingredients and sources of radiation. * * * * * (c) * * * 3 Provided that its use is functional and suitable for the product and it is permitted for use at the lowest level necessary to accomplish the desired technical effect as determined in specific cases prior to label approval under part 412. * * * * * 22. In § 424.22, revise paragraph (c)(4)(i) introductory text to read as follows: § 424.22 Certain other permitted uses. * * * * * (c) * * * (4) * * * (i) The labels on packages of meat food and poultry products irradiated in their entirety, in conformance with this section and with 21 CFR 179.26(a) and (b), must bear the logo shown at the end of this paragraph. Unless the word ‘‘Irradiated’’ is part of the product name, labels also must bear a statement such as ‘‘Treated with radiation’’ or ‘‘Treated by irradiation.’’ The logo must be placed in conjunction with the required statement, if the statement is used. The statement is not required to be more prominent than the declaration of ingredients required under § 317.2(c)(2). Done in Washington, DC, on November 29, 2011. Alfred V. Almanza Administrator. [FR Doc. 2011–30992 Filed 12–2–11; 8:45 am] BILLING CODE 3410–DM–P BUREAU OF CONSUMER FINANCIAL PROTECTION 12 CFR Chapter X [Docket No. CFPB—2011–0039] Streamlining Inherited Regulations Bureau of Consumer Financial Protection. ACTION: Notice of streamlining project; request for information. srobinson on DSK4SPTVN1PROD with PROPOSALS AGENCY: The Bureau of Consumer Financial Protection (the Bureau) is requesting specific suggestions from the public for streamlining regulations it recently inherited from other Federal agencies. This document asks the public SUMMARY: VerDate Mar<15>2010 18:28 Dec 02, 2011 Jkt 226001 to identify provisions of the inherited regulations that the Bureau should make the highest priority for updating, modifying, or eliminating because they are outdated, unduly burdensome, or unnecessary. This document discusses several specific requirements that may warrant review. It also seeks suggestions for practical measures to make complying with the regulations easier. DATES: Comments must be submitted by March 5, 2012. Commenters will have 30 additional days, until April 3, 2012, to respond to other comments. ADDRESSES: Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to ‘‘Docket No. CFPB–2011–0039.’’ Comments should be submitted to: • Electronic: http://www.regulations. gov. Follow the instructions for submitting comments. • Mail: Research, Markets & Regulations Division, Bureau of Consumer Financial Protection, 1500 Pennsylvania Avenue NW., (Attn: 1801 L Street NW), Washington, DC 20220. • Hand Delivery/Courier in Lieu of Mail: Research, Markets & Regulations Division, Bureau of Consumer Financial Protection, 1700 G Street NW., Washington, DC 20006. In general, all comments received will be posted without change to http:// www.regulations.gov. In addition, comments will be available for public inspection and copying at 1700 G Street NW., Washington, DC 20006, on official business days between the hours of 10 a.m. and 5 p.m. Eastern Time. You can make an appointment to inspect comments by telephoning (202) 435– 7275. All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Sensitive personal information, such as account numbers or social security numbers, should not be included. Comments will not be edited to remove any identifying or contact information. FOR FURTHER INFORMATION CONTACT: Jane Gell, Senior Counsel and Special Advisor; Daniel Brown, Counsel, Research, Markets & Regulations Division, Bureau of Consumer Financial Protection, (202) 453–7700. SUPPLEMENTARY INFORMATION: I. Background The Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act or Act) 1 established the Bureau and, on July 21, 2011, 1 Public PO 00000 transferred to the Bureau rulemaking authority under Federal consumer financial laws previously vested in seven other Federal agencies.2 Accordingly, the Bureau assumed responsibility over the various regulations that these agencies had issued under this rulemaking authority.3 In the coming weeks, the Bureau will republish the prior agencies’ regulations implementing fourteen consumer laws 4 (the ‘‘inherited regulations’’) as regulations of the Bureau, which will be codified in Chapter X of Title 12 of the Code of Federal Regulations. These republished regulations will incorporate only technical changes and will not impose new substantive obligations. The technical changes reflect the transfer of authority to the Bureau and certain other amendments made by the Dodd-Frank Act to the underlying statutes. The inherited regulations serve important public policy purposes and provide key protections to consumers, as discussed further below. But the Bureau believes there may be opportunities to streamline the inherited regulations by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions. With this document, the Bureau is seeking specific suggestions from the public for the highest priority areas for streamlining.5 2 These agencies are: The Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), the Federal Trade Commission (FTC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), and the Department of Housing and Urban Development (HUD). 3 On July 21, 2011, the Bureau published a list of the rules and orders that it will enforce. See 76 FR 43569 (July 21, 2011). The Bureau assumed rulemaking authority for all the items on this list, except items 1 and 6 through 12 in section F (Federal Trade Commission). The Bureau also has assumed responsibility over Regulation FF, 12 CFR part 232, which the Board issued pursuant to its authority under the Fair Credit Reporting Act, and which was inadvertently omitted from the list. 4 These fourteen laws are: The Consumer Leasing Act, the Electronic Fund Transfer Act (except with respect to Section 920 of that Act), the Equal Credit Opportunity Act, the Fair Credit Reporting Act (except with respect to Sections 615(e) and 628 of that act), the Fair Debt Collection Practices Act, Subsections (b) through (f) of Section 43 of the Federal Deposit Insurance Act, Sections 502 through 509 of the Gramm-Leach-Bliley Act (except for Section 505 as it applies to Section 501(b)), the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the S.A.F.E. Mortgage Licensing Act, the Truth in Lending Act, the Truth in Savings Act, Section 626 of the Omnibus Appropriations Act, 2009, and the Interstate Land Sales Full Disclosure Act. 5 This request for information is based in part on guidance provided by the Office of Management and Budget Memorandum for the Heads of Independent Regulatory Agencies, M–11–28, Law 111–203, 124 Stat. 1376 (2010). Frm 00028 Fmt 4702 Sfmt 4702 75825 E:\FR\FM\05DEP1.SGM Continued 05DEP1 75826 Federal Register / Vol. 76, No. 233 / Monday, December 5, 2011 / Proposed Rules srobinson on DSK4SPTVN1PROD with PROPOSALS Setting priorities is necessary to ensure that the Bureau’s resources—and the resources of stakeholders who would comment on any proposed revisions—are spent identifying the most promising areas for streamlining and addressing them appropriately. Public input is essential to selecting these priorities. II. Streamlining the Inherited Regulations Regulation is critical to achieving important public objectives such as fair, stable, and efficient markets. Regulation of consumer financial services, in particular, is an essential tool for achieving key purposes and objectives Congress set forth for the Bureau, including: providing consumers with timely and understandable information about transactions; protecting consumers from unfair, deceptive, or abusive practices and from discrimination; ensuring markets operate fairly, transparently, and efficiently; and ensuring access to consumer financial products and services for all consumers. In addition, each of the laws on which the inherited regulations are based has its own objectives, such as better informing consumers in the market or markets subject to the law. Regulation is critical to address failures in markets for consumer financial services that markets will not correct on their own. Sometimes regulation is necessary to produce information for the marketplace that the market will not generate on its own. For example, before adoption of the Truth in Lending Act (TILA), different lenders disclosed credit costs in different ways for the same product, making comparison difficult or impossible. TILA generally requires uniform disclosure of the cost of credit. The Dodd-Frank Act requires the Bureau to streamline disclosure of mortgage costs by consolidating TILA disclosures with disclosures of mortgage settlement costs under the Real Estate Settlement Procedures Act. Sometimes better disclosures and better consumer education are not sufficient to protect consumers and the marketplace, making substantive regulations necessary to accomplish these goals. In the lead-up to the financial crisis, market forces did not ensure adequate underwriting of mortgage loans and lenders made large numbers of loans without due regard to borrowers’ repayment ability. The Dodd-Frank Act requires lenders to ‘‘Executive Order 13579, ‘Regulation and Independent Regulatory Agencies’ ’’ (July 22, 2011). VerDate Mar<15>2010 18:28 Dec 02, 2011 Jkt 226001 make a reasonable and good faith determination that a borrower can repay his or her mortgage.6 The Act also addresses the failure of the market to curb certain servicing practices that harm consumers. Consumers cannot feasibly switch servicers, so servicers often lack sufficient incentives to treat consumers appropriately. The DoddFrank Act creates new protections for consumers against certain harmful servicing practices.7 For the next year the Bureau is focusing most of its rulemaking resources on these and other mortgage reforms that Congress instructed the Bureau to implement. This focus is dictated by the January 2013 statutory deadline for most of these rules. At the same time, the Bureau wants to start reviewing the inherited regulations. In document, the Bureau is focused on identifying the highest priorities for streamlining these regulations. In addition to authorizing new rules to address market failures, Congress also authorized the Bureau to ‘‘reduce unwarranted regulatory burden’’ by regularly identifying and addressing ‘‘outdated, unnecessary, or unduly burdensome regulations.’’ 8 Some of the consumer protection statutes also authorize the Bureau to make adjustments and exceptions to statutory requirements where necessary or appropriate to facilitate compliance.9 Different circumstances may point to opportunities for streamlining rules and facilitating compliance. Some regulations may have become overly complex and unnecessarily difficult to understand and comply with, presenting an opportunity for simplification. Differences between regulations, such as differences in definitions of key terms, may cause confusion, presenting an opportunity for standardization where underlying statutes permit. In some cases, the Bureau has inherited from different agencies several regulations implementing the same law, which may present opportunities for harmonization.10 6 Public Law 111–203 § 1411, 124 Stat. 1376, 2142 (to be codified at 15 U.S.C. 1639c). 7 Public Law 111–203 §§ 1461–1465, 124 Stat. 1376, 2178–85 (to be codified at 15 U.S.C. 1639dg). 8 Public Law 111–203 § 1021, 124 Stat. 1376, 1980 (to be codified at 12 U.S.C. 5511). 9 See, e.g., 15 U.S.C. 1667f (Consumer Leasing Act); 15 U.S.C. 1693b(c) (Electronic Fund Transfer Act); 15 U.S.C. 1691b (Equal Credit Opportunity Act); 12 U.S.C. 2804(a) (Home Mortgage Disclosure Act); 12 U.S.C. 2617(a) (Real Estate Settlement Procedures Act); 15 U.S.C. 1604(a) (Truth in Lending Act); 12 U.S.C. 4308(a)(3) (Truth in Savings Act). 10 As the Bureau republishes the inherited regulations in the coming weeks, it will consolidate PO 00000 Frm 00029 Fmt 4702 Sfmt 4702 Due to changing technology or market practices, some provisions of regulations may be less necessary or no longer needed. Provisions may refer to technologies that are no longer frequently used; fail to reflect technologies that are now in use; or inhibit the use of existing or emerging technologies. These types of circumstances may call for updating regulations. Regulations may also need to be reviewed to determine if they unnecessarily restrict consumer choice, inhibit innovation, or inappropriately favor certain business models. Provisions of regulations may be more stringent than necessary to achieve the objective, or they may have little incremental effect over and above other existing laws or market forces. Provisions may suit larger market participants but impose unnecessarily disproportionate costs on smaller participants. These types of circumstances may call for relaxing, reducing, or eliminating provisions of regulations at least for some types or sizes of providers. Various circumstances can also warrant stronger rules. For example, market changes may have produced gaps in coverage of certain types of entities or transactions. Disclosures may have to be supplemented or replaced with restrictions on sales practices or product terms that are unfair according to established legal standards. The Bureau will consider in due course how the inherited regulations may need to be strengthened. In this document, the Bureau is focused on identifying streamlining opportunities. III. Goals, Approaches, and Potential Outcomes of This Targeted Review The principal goal of this initial, targeted review is to identify the highest priority areas for attempting to streamline the inherited regulations by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions. The Bureau is focused on identifying improvements it can make without Congressional action—that is, improvements that are consistent with the underlying statute in question and with the discretion Congress has given the Bureau to implement that statute, including any discretion to adopt exceptions from, or adjustments to, statutory requirements. separate regulations issued by different agencies to implement the same law. Because the Bureau will make only technical changes with republication, the republished rules will preserve some small but arguably substantive differences among the predecessor rules. The Bureau seeks comment on whether and how best to harmonize the remaining differences. E:\FR\FM\05DEP1.SGM 05DEP1 srobinson on DSK4SPTVN1PROD with PROPOSALS Federal Register / Vol. 76, No. 233 / Monday, December 5, 2011 / Proposed Rules If the Bureau judges that a desired change requires a statutory amendment, the Bureau will consider making recommendations to Congress. But the purpose of this document is not to solicit recommendations for changes, however important, that require Congressional action. After the Bureau receives public input and determines its priorities, the Bureau will consider whether to issue a notice of proposed rulemaking to streamline specific provisions of regulations. Examples of specific provisions the Bureau may consider revising are listed in Part V. The Bureau could also, or instead, fold proposals to revise specific provisions into one or more of the broader rulemakings that will implement the Dodd-Frank Act’s changes to the Truth in Lending, Real Estate Settlement Procedures, Home Mortgage Disclosure, and Equal Credit Opportunity Acts. The Bureau also could address specific provisions of regulations when it reviews those regulations in due course. The Bureau will also consider practical measures to make it easier for firms, especially smaller ones, to comply with the inherited regulations. In setting priorities for streamlining, the Bureau will consider five factors: first, the potential benefits and costs of a potential regulatory change for consumers and covered entities; second, the likelihood that the Bureau would be able to achieve the benefits consistent with the underlying statute; third, the speed with which the public would realize the benefits; fourth, the governmental and private resources it would take to realize the benefits; and fifth, the state of the evidence with which to judge these factors. These criteria have certain implications. The Bureau will not consider changes that would undermine important public policy objectives simply to reduce compliance burdens. The Bureau also is mindful that the benefits of regulatory stability, which allows firms to plan with confidence, sometimes outweigh the benefits of small improvements to a regulation. In addition, a change that reduces costs in one respect may increase costs in another respect, and the Bureau will be mindful of these tradeoffs. For example, making two regulations more consistent with each other may make compliance easier but set more stringent requirements for at least some transactions. The Bureau will seek the most reliable available evidence, including quantitative data where feasible, to facilitate analysis of key issues. The Bureau will be sensitive to the VerDate Mar<15>2010 18:28 Dec 02, 2011 Jkt 226001 sometimes substantial cost of obtaining data and will seek to ensure that the benefits of procuring the data are worth their cost. However, the Bureau will also expect that advocates of specific revisions to regulations provide evidence to justify any assertion that the benefits of these revisions would justify the costs. Another goal of this document is to facilitate planning for reviewing the inherited regulations more broadly. The Bureau’s review of inherited regulations must proceed in stages. It would not be feasible for the Bureau or the public to review or revise all of the inherited regulations at once. Considering changes to regulations takes time—the law and prudence require robust analysis and public comment on substantive changes to regulations. This process takes substantial public resources. It also takes substantial private resources of the stakeholders that engage in the process. The Bureau’s highest rulemaking priority in the near term is careful implementation of mortgage reforms of the Dodd-Frank Act, most of which have a January 2013 deadline. The Bureau must set priorities for addressing other regulations—those in need of streamlining and those in need of strengthening—and decide where to begin, and then it will seek to proceed in the way that best uses public and private resources. For this reason, the Bureau also seeks input on how it should approach reviewing the inherited regulations, including the order in which it should review them. Comment is sought on these goals, approaches, and potential outcomes. IV. General Requests for Information The questions below solicit comment on (a) Planning for reviews of the inherited regulations generally; (b) specific opportunities for streamlining the inherited regulations; and (c) practical measures to facilitate compliance and promote innovation. The inherited regulations will be republished shortly.11 Comments should prominently identify the specific provision (as republished) of the specific regulation addressed. 1. The Bureau could define its priorities for reviewing the inherited regulations in at least two different ways. It could focus on a particular regulation or set of regulations. Or it could focus on a market sector and all of the regulations that apply to that sector. Commenters may suggest other approaches. What approach should the 11 The inherited regulations implement the statutes listed in footnote 4. PO 00000 Frm 00030 Fmt 4702 Sfmt 4702 75827 Bureau take, and why? In what order should the Bureau review the inherited regulations, and why? 2. Commenters are invited to offer their highest priorities for updating, modifying, or eliminating specific provisions of regulations that are outdated, unduly burdensome, or unnecessary. Commenters are asked to single out their top priority. Suggestions should focus on revisions that would not require Congressional action. Commenters may wish to take into account the five factors the Bureau plans to consider to set its priorities: The size, likelihood, and speed of potential gains from streamlining; the resources needed to achieve the gains; and the strength of the evidence with which to judge these factors. Commenters may consider suggesting provisions of regulations that should be: • Simplified, rationalized, or consolidated; • Relaxed, modified, or eliminated, perhaps for smaller firms or certain classes of transactions, without undermining essential protections; • Updated to reflect current practices and technology; • Adjusted to avoid unintended consequences; or • Changed to remove an obstacle to responsible innovation. 3. The Bureau is in the midst of testing new mortgage disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act. Are there other required disclosures that available evidence suggests should be considered for modification or removal? 4. For each suggestion in response to questions 2 and 3, commenters are asked to describe and, where possible, quantify the potential benefits and costs to consumers and providers of changing the regulation as recommended. 5. For each suggestion, commenters are asked to submit or identify empirical models, data, research, case studies, or other evidence the Bureau could use to analyze and, if possible, to quantify or describe the potential costs and benefits of the changes the commenter advocates. 6. Are there pilots, field tests, or demonstrations that the Bureau could launch to better assess benefits and costs of potential revisions to regulations? 7. The Bureau is interested in identifying practical measures it can take, apart from revising regulations, to make compliance with the inherited regulations easier. For example, are there systematic ways the Bureau could improve guidance about how to comply with regulations? Are there ways the Bureau could make it easier for financial E:\FR\FM\05DEP1.SGM 05DEP1 75828 Federal Register / Vol. 76, No. 233 / Monday, December 5, 2011 / Proposed Rules institutions to obtain answers to specific compliance questions they may have? The Bureau will evaluate recommendations according to the same factors it will use to evaluate suggestions to revise regulations. 8. The Bureau also is interested in identifying practical measures it could take to promote, or remove obstacles to, responsible innovation in consumer financial services markets. srobinson on DSK4SPTVN1PROD with PROPOSALS V. Specific Illustrations of Potential Streamlining Opportunities In this part, the Bureau seeks information and views about specific potential revisions to the inherited regulations. The Bureau has not necessarily determined its authority to address the examples discussed below. In some cases, the Bureau may determine after further consideration that statutory amendments may be required. Nor has the Bureau determined whether it should adopt any of the revisions discussed below, or whether these particular revisions, if warranted, would be more important than other possible revisions the Bureau may consider after receiving public input. Consistent and Sufficient Definitions Several of the inherited regulations define key terms differently. For example, Regulation Z (12 CFR part 226), Regulation E (12 CFR part 205), Regulation DD (12 CFR part 230), Regulation V (12 CFR part 222), and Regulation P (12 CFR part 216 and parallel regulations at 12 CFR part 332 (FDIC), 16 CFR part 313 (FTC), 12 CFR part 716 and 741.220 (NCUA), 12 CFR part 40 (OCC), 12 CFR part 573 (OTS)) each define ‘‘consumer’’ differently. Similarly, Regulation B (12 CFR part 202) and Regulation Z define ‘‘credit’’ differently. Regulation Z defines ‘‘business day’’ differently than Regulation CC (12 CFR part 229), for which the Bureau shares certain joint rulewriting authorities with the Federal Reserve Board. Sometimes different definitions are necessary to fulfill different statutory objectives, but other times those differences may be unnecessary. What terms, if any, should be defined more consistently across these regulations? How, precisely, should they be defined? Sometimes key terms are not defined. For example, under Regulations B and C (12 CFR part 203), important obligations of a creditor depend upon whether an application is ‘‘approved,’’ ‘‘denied,’’ or ‘‘withdrawn,’’ but neither regulation defines these terms, leaving room for different applications of the same terms. What terms, if any, should VerDate Mar<15>2010 18:28 Dec 02, 2011 Jkt 226001 be defined for the first time or defined more clearly? Coverage/Scope of Regulation B (Equal Credit Opportunity) Annual Privacy Notices Under Regulation B, all creditors that take applications for home purchase loans or refinancings of home purchase loans must request information about applicant characteristics such as race and ethnicity. 12 CFR 202.913(a). Regulators can use these data to monitor compliance with fair lending obligations. Under Regulation C, some depository and other mortgage lending institutions are exempt from collecting applicant characteristic information based on factors such as location, size, and loan volume. 12 CFR 203.1(c), 203.2(e). Should Regulations B and C have a consistent exemption for data collection, or do the data collections serve different purposes justifying different scopes of coverage? Under Regulation B, all creditors that take action on applications for credit must timely notify applicants of the action. 12 CFR 202.9(a). Should creditors that receive a small number of applications be exempted from this requirement? If so, what is the appropriate number of applications? Should the existence or size of an exemption vary based on type of product? If the Bureau adopted an exemption, what adjustments would it need to make to requirements for adverse action notices under the Fair Credit Reporting Act? Regulation P of the Board of Governors of the Federal Reserve System and parallel regulations of other Federal agencies govern the treatment of nonpublic personal information about consumers. These regulations generally require that financial services providers give a privacy notice to a customer annually during a customer relationship. Providers have questioned the value of providing consumers annual notices where the provider’s privacy practices have not changed since the last notice, at least where the provider does not share information with other firms (or shares in narrow cases). Should there be an exception from the requirement to provide an annual privacy notice in these or any other circumstances? ATM Fee Disclosure Under Regulation E, any person that operates an automated teller machine (ATM) that imposes a fee on any consumer for withdrawing funds or inquiring about a balance must disclose the amount of any fee the operator charges. The operator must disclose the fee on the ATM screen or in a paper notice before the consumer must pay a fee. In addition, the regulation requires the operator to post a sign on the ATM itself that fees ‘‘will’’ or ‘‘may be imposed’’ but does not require the sign to state the fee amount. 12 CFR 205.16(c). Should the requirement to post a sign be eliminated? Are other disclosures of ATM fees adequate to inform consumers? Coverage/Scope of Regulation C (Home Mortgage Disclosure) Under Regulation C, a depository institution generally must collect, report, and disclose certain mortgage data if it originated or refinanced one home purchase loan in the preceding calendar year, its assets exceed a specified minimum, and it is located in a metropolitan statistical area. 12 CFR 203.2(e). As a result, some depository institutions that do not originate home purchase loans but occasionally refinance a home purchase loan as an accommodation for a customer are required to collect, report, and disclose mortgage data. Should depositories that make or refinance small numbers of loans be exempted? If so, what number of loans would be appropriate? PO 00000 Frm 00031 Fmt 4702 Sfmt 4702 Coverage/Scope of Regulation Z (Truth in Lending) In general, Regulation Z covers a creditor if it extended consumer credit more than 25 times in the past calendar year (or more than 5 times, for transactions secured by a dwelling). 12 CFR 226.2(a)(17)(v). Should these thresholds be raised? What would be an appropriate threshold? And should a similar exemption be applied to disclosure requirements under the Real Estate Settlement Procedures Act that the Bureau will integrate with Truth in Lending disclosure requirements? Regulation Z generally covers a creditor if it makes more than 25 consumer loans in total of any type. Should different types of consumer credit have different thresholds? For example, should creditors be exempted from the student loan requirements if they made less than a certain number of student loans in the preceding calendar year, regardless of how many other consumer loans they made? Ability To Pay Credit Card Debt Regulation Z requires credit card issuers, before extending credit, to assess the individual borrower’s ability E:\FR\FM\05DEP1.SGM 05DEP1 Federal Register / Vol. 76, No. 233 / Monday, December 5, 2011 / Proposed Rules to repay the loan. 12 CFR 226.51. This requirement is based on a provision of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act), Public Law 111–24, 123 Stat. 1734 (2009). Concern has been expressed by some card issuers and also some members of Congress that these rules may have the unintended consequence of precluding some individuals, especially non-working spouses, from obtaining credit they are capable of repaying. Should this section of Regulation Z be amended, and, if so, how? Electronic Disclosures srobinson on DSK4SPTVN1PROD with PROPOSALS Interstate Land Sales Full Disclosure Act The Interstate Land Sales Full Disclosure Act (ILSA) (15 U.S.C. 1701 et seq.) imposes reporting, disclosure, and anti-fraud protections on some interstate land sales. Commentators have questioned whether improvements in consumers’ access to information about these sales warrant changes to reporting and disclosure requirements. They have also indicated that technological changes may warrant updates to the form and manner of reporting and disclosure. Changes in state property regulations in past decades may also warrant changes to ILSA regulations. For these or other reasons, what changes to implementing regulations, if any, should the Bureau make? 18:28 Dec 02, 2011 [FR Doc. 2011–31030 Filed 12–2–11; 8:45 am] BILLING CODE 4810–AM–P DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG–130777–11] RIN 1545–BK45 The inherited regulations require that certain disclosures, including periodic statements and receipts under Regulations E and Z, be provided to consumers in writing in a form that they may keep. The Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. 7001 et seq.) permits disclosures that must be provided in writing to be provided electronically if the provider meets certain requirements, including obtaining the consumer’s consent. Some parts of the inherited regulations permit certain disclosures to be provided electronically or in writing. Should the Bureau permit other disclosures now required to be in writing to be delivered in electronic form? In addition, mobile banking has become more prevalent and widely used by consumers since the E-Sign Act was adopted. For mobile banking applications, should the Bureau consider allowing certain disclosures to be provided by text messaging, even though text messages are not readily retainable and, if so, under what circumstances and with what safeguards? VerDate Mar<15>2010 Dated: November 29, 2011. Raj Date, Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau. Jkt 226001 Treasury Inflation-Protected Securities Issued at a Premium Internal Revenue Service (IRS), Treasury. ACTION: Notice of proposed rulemaking by cross-reference to temporary regulations and notice of public hearing. AGENCY: 75829 SUPPLEMENTARY INFORMATION: Background and Explanation of Provisions Temporary regulations in the Rules and Regulations section of this issue of the Federal Register amend the Income Tax Regulations (26 CFR part 1) relating to section 1275. The temporary regulations provide that the coupon bond method described in § 1.1275–7(d) applies to Treasury Inflation-Protected Securities (TIPS) issued with more than a de minimis amount of premium. The temporary regulations apply to TIPS issued on or after April 8, 2011. The text of the temporary regulations also serves as the text of these proposed regulations. In addition to comments on the text of the temporary regulations, the IRS and the Treasury Department request comments on whether the rules in the temporary regulations should be extended to other types of inflationindexed debt instruments. In the Rules and Regulations section of this issue of the Federal Register, the IRS is issuing temporary regulations that provide guidance on the tax treatment of Treasury InflationProtected Securities issued with more than a de minimis amount of premium. The text of those regulations also serves as the text of these proposed regulations. This document also provides notice of a public hearing on these proposed regulations. DATES: Written or electronic comments must be received by March 5, 2012. Outlines of topics to be discussed at the public hearing scheduled for March 28, 2012, must be received by March 7, 2012. Send submissions to: CC:PA:LPD:PR (REG–130777–11), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG–130777– 11), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically, via the Federal eRulemaking Portal at http://www.regulations.gov (IRS REG– 130777–11). FOR FURTHER INFORMATION CONTACT: Concerning the proposed regulations, William E. Blanchard, (202) 622–3950; concerning submissions of comments, the hearing, and/or to be placed on the building access list to attend the hearing, Oluwafunmilayo (Funmi) Taylor, (202) 622–7180 (not toll-free numbers). Special Analyses It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small businesses. Comments and Public Hearing Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department specifically request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying. A public hearing has been scheduled for March 28, 2012, beginning at 10 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC. Due to building security procedures, visitors must enter through the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the SUMMARY: ADDRESSES: PO 00000 Frm 00032 Fmt 4702 Sfmt 4702 E:\FR\FM\05DEP1.SGM 05DEP1

Agencies

[Federal Register Volume 76, Number 233 (Monday, December 5, 2011)]
[Proposed Rules]
[Pages 75825-75829]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31030]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Chapter X

[Docket No. CFPB--2011-0039]


Streamlining Inherited Regulations

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice of streamlining project; request for information.

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SUMMARY: The Bureau of Consumer Financial Protection (the Bureau) is 
requesting specific suggestions from the public for streamlining 
regulations it recently inherited from other Federal agencies. This 
document asks the public to identify provisions of the inherited 
regulations that the Bureau should make the highest priority for 
updating, modifying, or eliminating because they are outdated, unduly 
burdensome, or unnecessary. This document discusses several specific 
requirements that may warrant review. It also seeks suggestions for 
practical measures to make complying with the regulations easier.

DATES: Comments must be submitted by March 5, 2012. Commenters will 
have 30 additional days, until April 3, 2012, to respond to other 
comments.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Docket No. 
CFPB-2011-0039.'' Comments should be submitted to:
     Electronic: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Research, Markets & Regulations Division, Bureau of 
Consumer Financial Protection, 1500 Pennsylvania Avenue NW., (Attn: 
1801 L Street NW), Washington, DC 20220.
     Hand Delivery/Courier in Lieu of Mail: Research, Markets & 
Regulations Division, Bureau of Consumer Financial Protection, 1700 G 
Street NW., Washington, DC 20006.
    In general, all comments received will be posted without change to 
http://www.regulations.gov. In addition, comments will be available for 
public inspection and copying at 1700 G Street NW., Washington, DC 
20006, on official business days between the hours of 10 a.m. and 5 
p.m. Eastern Time. You can make an appointment to inspect comments by 
telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or social 
security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Jane Gell, Senior Counsel and Special 
Advisor; Daniel Brown, Counsel, Research, Markets & Regulations 
Division, Bureau of Consumer Financial Protection, (202) 453-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act or Act) \1\ established the Bureau and, on July 21, 
2011, transferred to the Bureau rulemaking authority under Federal 
consumer financial laws previously vested in seven other Federal 
agencies.\2\ Accordingly, the Bureau assumed responsibility over the 
various regulations that these agencies had issued under this 
rulemaking authority.\3\
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    \1\ Public Law 111-203, 124 Stat. 1376 (2010).
    \2\ These agencies are: The Board of Governors of the Federal 
Reserve System (Board), the Federal Deposit Insurance Corporation 
(FDIC), the Federal Trade Commission (FTC), the National Credit 
Union Administration (NCUA), the Office of the Comptroller of the 
Currency (OCC), the Office of Thrift Supervision (OTS), and the 
Department of Housing and Urban Development (HUD).
    \3\ On July 21, 2011, the Bureau published a list of the rules 
and orders that it will enforce. See 76 FR 43569 (July 21, 2011). 
The Bureau assumed rulemaking authority for all the items on this 
list, except items 1 and 6 through 12 in section F (Federal Trade 
Commission). The Bureau also has assumed responsibility over 
Regulation FF, 12 CFR part 232, which the Board issued pursuant to 
its authority under the Fair Credit Reporting Act, and which was 
inadvertently omitted from the list.
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    In the coming weeks, the Bureau will republish the prior agencies' 
regulations implementing fourteen consumer laws \4\ (the ``inherited 
regulations'') as regulations of the Bureau, which will be codified in 
Chapter X of Title 12 of the Code of Federal Regulations. These 
republished regulations will incorporate only technical changes and 
will not impose new substantive obligations. The technical changes 
reflect the transfer of authority to the Bureau and certain other 
amendments made by the Dodd-Frank Act to the underlying statutes.
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    \4\ These fourteen laws are: The Consumer Leasing Act, the 
Electronic Fund Transfer Act (except with respect to Section 920 of 
that Act), the Equal Credit Opportunity Act, the Fair Credit 
Reporting Act (except with respect to Sections 615(e) and 628 of 
that act), the Fair Debt Collection Practices Act, Subsections (b) 
through (f) of Section 43 of the Federal Deposit Insurance Act, 
Sections 502 through 509 of the Gramm-Leach-Bliley Act (except for 
Section 505 as it applies to Section 501(b)), the Home Mortgage 
Disclosure Act, the Real Estate Settlement Procedures Act, the 
S.A.F.E. Mortgage Licensing Act, the Truth in Lending Act, the Truth 
in Savings Act, Section 626 of the Omnibus Appropriations Act, 2009, 
and the Interstate Land Sales Full Disclosure Act.
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    The inherited regulations serve important public policy purposes 
and provide key protections to consumers, as discussed further below. 
But the Bureau believes there may be opportunities to streamline the 
inherited regulations by updating, modifying, or eliminating outdated, 
unduly burdensome, or unnecessary provisions. With this document, the 
Bureau is seeking specific suggestions from the public for the highest 
priority areas for streamlining.\5\
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    \5\ This request for information is based in part on guidance 
provided by the Office of Management and Budget Memorandum for the 
Heads of Independent Regulatory Agencies, M-11-28, ``Executive Order 
13579, `Regulation and Independent Regulatory Agencies' '' (July 22, 
2011).

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[[Page 75826]]

    Setting priorities is necessary to ensure that the Bureau's 
resources--and the resources of stakeholders who would comment on any 
proposed revisions--are spent identifying the most promising areas for 
streamlining and addressing them appropriately. Public input is 
essential to selecting these priorities.

II. Streamlining the Inherited Regulations

    Regulation is critical to achieving important public objectives 
such as fair, stable, and efficient markets. Regulation of consumer 
financial services, in particular, is an essential tool for achieving 
key purposes and objectives Congress set forth for the Bureau, 
including: providing consumers with timely and understandable 
information about transactions; protecting consumers from unfair, 
deceptive, or abusive practices and from discrimination; ensuring 
markets operate fairly, transparently, and efficiently; and ensuring 
access to consumer financial products and services for all consumers. 
In addition, each of the laws on which the inherited regulations are 
based has its own objectives, such as better informing consumers in the 
market or markets subject to the law.
    Regulation is critical to address failures in markets for consumer 
financial services that markets will not correct on their own. 
Sometimes regulation is necessary to produce information for the 
marketplace that the market will not generate on its own. For example, 
before adoption of the Truth in Lending Act (TILA), different lenders 
disclosed credit costs in different ways for the same product, making 
comparison difficult or impossible. TILA generally requires uniform 
disclosure of the cost of credit. The Dodd-Frank Act requires the 
Bureau to streamline disclosure of mortgage costs by consolidating TILA 
disclosures with disclosures of mortgage settlement costs under the 
Real Estate Settlement Procedures Act.
    Sometimes better disclosures and better consumer education are not 
sufficient to protect consumers and the marketplace, making substantive 
regulations necessary to accomplish these goals. In the lead-up to the 
financial crisis, market forces did not ensure adequate underwriting of 
mortgage loans and lenders made large numbers of loans without due 
regard to borrowers' repayment ability. The Dodd-Frank Act requires 
lenders to make a reasonable and good faith determination that a 
borrower can repay his or her mortgage.\6\ The Act also addresses the 
failure of the market to curb certain servicing practices that harm 
consumers. Consumers cannot feasibly switch servicers, so servicers 
often lack sufficient incentives to treat consumers appropriately. The 
Dodd-Frank Act creates new protections for consumers against certain 
harmful servicing practices.\7\
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    \6\ Public Law 111-203 Sec.  1411, 124 Stat. 1376, 2142 (to be 
codified at 15 U.S.C. 1639c).
    \7\ Public Law 111-203 Sec. Sec.  1461-1465, 124 Stat. 1376, 
2178-85 (to be codified at 15 U.S.C. 1639d-g).
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    For the next year the Bureau is focusing most of its rulemaking 
resources on these and other mortgage reforms that Congress instructed 
the Bureau to implement. This focus is dictated by the January 2013 
statutory deadline for most of these rules.
    At the same time, the Bureau wants to start reviewing the inherited 
regulations. In document, the Bureau is focused on identifying the 
highest priorities for streamlining these regulations. In addition to 
authorizing new rules to address market failures, Congress also 
authorized the Bureau to ``reduce unwarranted regulatory burden'' by 
regularly identifying and addressing ``outdated, unnecessary, or unduly 
burdensome regulations.'' \8\ Some of the consumer protection statutes 
also authorize the Bureau to make adjustments and exceptions to 
statutory requirements where necessary or appropriate to facilitate 
compliance.\9\
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    \8\ Public Law 111-203 Sec.  1021, 124 Stat. 1376, 1980 (to be 
codified at 12 U.S.C. 5511).
    \9\ See, e.g., 15 U.S.C. 1667f (Consumer Leasing Act); 15 U.S.C. 
1693b(c) (Electronic Fund Transfer Act); 15 U.S.C. 1691b (Equal 
Credit Opportunity Act); 12 U.S.C. 2804(a) (Home Mortgage Disclosure 
Act); 12 U.S.C. 2617(a) (Real Estate Settlement Procedures Act); 15 
U.S.C. 1604(a) (Truth in Lending Act); 12 U.S.C. 4308(a)(3) (Truth 
in Savings Act).
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    Different circumstances may point to opportunities for streamlining 
rules and facilitating compliance. Some regulations may have become 
overly complex and unnecessarily difficult to understand and comply 
with, presenting an opportunity for simplification. Differences between 
regulations, such as differences in definitions of key terms, may cause 
confusion, presenting an opportunity for standardization where 
underlying statutes permit. In some cases, the Bureau has inherited 
from different agencies several regulations implementing the same law, 
which may present opportunities for harmonization.\10\
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    \10\ As the Bureau republishes the inherited regulations in the 
coming weeks, it will consolidate separate regulations issued by 
different agencies to implement the same law. Because the Bureau 
will make only technical changes with republication, the republished 
rules will preserve some small but arguably substantive differences 
among the predecessor rules. The Bureau seeks comment on whether and 
how best to harmonize the remaining differences.
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    Due to changing technology or market practices, some provisions of 
regulations may be less necessary or no longer needed. Provisions may 
refer to technologies that are no longer frequently used; fail to 
reflect technologies that are now in use; or inhibit the use of 
existing or emerging technologies. These types of circumstances may 
call for updating regulations. Regulations may also need to be reviewed 
to determine if they unnecessarily restrict consumer choice, inhibit 
innovation, or inappropriately favor certain business models.
    Provisions of regulations may be more stringent than necessary to 
achieve the objective, or they may have little incremental effect over 
and above other existing laws or market forces. Provisions may suit 
larger market participants but impose unnecessarily disproportionate 
costs on smaller participants. These types of circumstances may call 
for relaxing, reducing, or eliminating provisions of regulations at 
least for some types or sizes of providers.
    Various circumstances can also warrant stronger rules. For example, 
market changes may have produced gaps in coverage of certain types of 
entities or transactions. Disclosures may have to be supplemented or 
replaced with restrictions on sales practices or product terms that are 
unfair according to established legal standards. The Bureau will 
consider in due course how the inherited regulations may need to be 
strengthened. In this document, the Bureau is focused on identifying 
streamlining opportunities.

III. Goals, Approaches, and Potential Outcomes of This Targeted Review

    The principal goal of this initial, targeted review is to identify 
the highest priority areas for attempting to streamline the inherited 
regulations by updating, modifying, or eliminating outdated, unduly 
burdensome, or unnecessary provisions. The Bureau is focused on 
identifying improvements it can make without Congressional action--that 
is, improvements that are consistent with the underlying statute in 
question and with the discretion Congress has given the Bureau to 
implement that statute, including any discretion to adopt exceptions 
from, or adjustments to, statutory requirements.

[[Page 75827]]

If the Bureau judges that a desired change requires a statutory 
amendment, the Bureau will consider making recommendations to Congress. 
But the purpose of this document is not to solicit recommendations for 
changes, however important, that require Congressional action.
    After the Bureau receives public input and determines its 
priorities, the Bureau will consider whether to issue a notice of 
proposed rulemaking to streamline specific provisions of regulations. 
Examples of specific provisions the Bureau may consider revising are 
listed in Part V. The Bureau could also, or instead, fold proposals to 
revise specific provisions into one or more of the broader rulemakings 
that will implement the Dodd-Frank Act's changes to the Truth in 
Lending, Real Estate Settlement Procedures, Home Mortgage Disclosure, 
and Equal Credit Opportunity Acts. The Bureau also could address 
specific provisions of regulations when it reviews those regulations in 
due course. The Bureau will also consider practical measures to make it 
easier for firms, especially smaller ones, to comply with the inherited 
regulations.
    In setting priorities for streamlining, the Bureau will consider 
five factors: first, the potential benefits and costs of a potential 
regulatory change for consumers and covered entities; second, the 
likelihood that the Bureau would be able to achieve the benefits 
consistent with the underlying statute; third, the speed with which the 
public would realize the benefits; fourth, the governmental and private 
resources it would take to realize the benefits; and fifth, the state 
of the evidence with which to judge these factors.
    These criteria have certain implications. The Bureau will not 
consider changes that would undermine important public policy 
objectives simply to reduce compliance burdens. The Bureau also is 
mindful that the benefits of regulatory stability, which allows firms 
to plan with confidence, sometimes outweigh the benefits of small 
improvements to a regulation. In addition, a change that reduces costs 
in one respect may increase costs in another respect, and the Bureau 
will be mindful of these tradeoffs. For example, making two regulations 
more consistent with each other may make compliance easier but set more 
stringent requirements for at least some transactions.
    The Bureau will seek the most reliable available evidence, 
including quantitative data where feasible, to facilitate analysis of 
key issues. The Bureau will be sensitive to the sometimes substantial 
cost of obtaining data and will seek to ensure that the benefits of 
procuring the data are worth their cost. However, the Bureau will also 
expect that advocates of specific revisions to regulations provide 
evidence to justify any assertion that the benefits of these revisions 
would justify the costs.
    Another goal of this document is to facilitate planning for 
reviewing the inherited regulations more broadly. The Bureau's review 
of inherited regulations must proceed in stages. It would not be 
feasible for the Bureau or the public to review or revise all of the 
inherited regulations at once. Considering changes to regulations takes 
time--the law and prudence require robust analysis and public comment 
on substantive changes to regulations. This process takes substantial 
public resources. It also takes substantial private resources of the 
stakeholders that engage in the process.
    The Bureau's highest rulemaking priority in the near term is 
careful implementation of mortgage reforms of the Dodd-Frank Act, most 
of which have a January 2013 deadline. The Bureau must set priorities 
for addressing other regulations--those in need of streamlining and 
those in need of strengthening--and decide where to begin, and then it 
will seek to proceed in the way that best uses public and private 
resources. For this reason, the Bureau also seeks input on how it 
should approach reviewing the inherited regulations, including the 
order in which it should review them.
    Comment is sought on these goals, approaches, and potential 
outcomes.

IV. General Requests for Information

    The questions below solicit comment on (a) Planning for reviews of 
the inherited regulations generally; (b) specific opportunities for 
streamlining the inherited regulations; and (c) practical measures to 
facilitate compliance and promote innovation. The inherited regulations 
will be republished shortly.\11\ Comments should prominently identify 
the specific provision (as republished) of the specific regulation 
addressed.
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    \11\ The inherited regulations implement the statutes listed in 
footnote 4.
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    1. The Bureau could define its priorities for reviewing the 
inherited regulations in at least two different ways. It could focus on 
a particular regulation or set of regulations. Or it could focus on a 
market sector and all of the regulations that apply to that sector. 
Commenters may suggest other approaches. What approach should the 
Bureau take, and why? In what order should the Bureau review the 
inherited regulations, and why?
    2. Commenters are invited to offer their highest priorities for 
updating, modifying, or eliminating specific provisions of regulations 
that are outdated, unduly burdensome, or unnecessary. Commenters are 
asked to single out their top priority. Suggestions should focus on 
revisions that would not require Congressional action. Commenters may 
wish to take into account the five factors the Bureau plans to consider 
to set its priorities: The size, likelihood, and speed of potential 
gains from streamlining; the resources needed to achieve the gains; and 
the strength of the evidence with which to judge these factors. 
Commenters may consider suggesting provisions of regulations that 
should be:
     Simplified, rationalized, or consolidated;
     Relaxed, modified, or eliminated, perhaps for smaller 
firms or certain classes of transactions, without undermining essential 
protections;
     Updated to reflect current practices and technology;
     Adjusted to avoid unintended consequences; or
     Changed to remove an obstacle to responsible innovation.
    3. The Bureau is in the midst of testing new mortgage disclosures 
under the Truth in Lending Act and Real Estate Settlement Procedures 
Act. Are there other required disclosures that available evidence 
suggests should be considered for modification or removal?
    4. For each suggestion in response to questions 2 and 3, commenters 
are asked to describe and, where possible, quantify the potential 
benefits and costs to consumers and providers of changing the 
regulation as recommended.
    5. For each suggestion, commenters are asked to submit or identify 
empirical models, data, research, case studies, or other evidence the 
Bureau could use to analyze and, if possible, to quantify or describe 
the potential costs and benefits of the changes the commenter 
advocates.
    6. Are there pilots, field tests, or demonstrations that the Bureau 
could launch to better assess benefits and costs of potential revisions 
to regulations?
    7. The Bureau is interested in identifying practical measures it 
can take, apart from revising regulations, to make compliance with the 
inherited regulations easier. For example, are there systematic ways 
the Bureau could improve guidance about how to comply with regulations? 
Are there ways the Bureau could make it easier for financial

[[Page 75828]]

institutions to obtain answers to specific compliance questions they 
may have? The Bureau will evaluate recommendations according to the 
same factors it will use to evaluate suggestions to revise regulations.
    8. The Bureau also is interested in identifying practical measures 
it could take to promote, or remove obstacles to, responsible 
innovation in consumer financial services markets.

V. Specific Illustrations of Potential Streamlining Opportunities

    In this part, the Bureau seeks information and views about specific 
potential revisions to the inherited regulations. The Bureau has not 
necessarily determined its authority to address the examples discussed 
below. In some cases, the Bureau may determine after further 
consideration that statutory amendments may be required. Nor has the 
Bureau determined whether it should adopt any of the revisions 
discussed below, or whether these particular revisions, if warranted, 
would be more important than other possible revisions the Bureau may 
consider after receiving public input.

Consistent and Sufficient Definitions

    Several of the inherited regulations define key terms differently. 
For example, Regulation Z (12 CFR part 226), Regulation E (12 CFR part 
205), Regulation DD (12 CFR part 230), Regulation V (12 CFR part 222), 
and Regulation P (12 CFR part 216 and parallel regulations at 12 CFR 
part 332 (FDIC), 16 CFR part 313 (FTC), 12 CFR part 716 and 741.220 
(NCUA), 12 CFR part 40 (OCC), 12 CFR part 573 (OTS)) each define 
``consumer'' differently. Similarly, Regulation B (12 CFR part 202) and 
Regulation Z define ``credit'' differently. Regulation Z defines 
``business day'' differently than Regulation CC (12 CFR part 229), for 
which the Bureau shares certain joint rulewriting authorities with the 
Federal Reserve Board.
    Sometimes different definitions are necessary to fulfill different 
statutory objectives, but other times those differences may be 
unnecessary. What terms, if any, should be defined more consistently 
across these regulations? How, precisely, should they be defined?
    Sometimes key terms are not defined. For example, under Regulations 
B and C (12 CFR part 203), important obligations of a creditor depend 
upon whether an application is ``approved,'' ``denied,'' or 
``withdrawn,'' but neither regulation defines these terms, leaving room 
for different applications of the same terms. What terms, if any, 
should be defined for the first time or defined more clearly?

Annual Privacy Notices

    Regulation P of the Board of Governors of the Federal Reserve 
System and parallel regulations of other Federal agencies govern the 
treatment of nonpublic personal information about consumers. These 
regulations generally require that financial services providers give a 
privacy notice to a customer annually during a customer relationship. 
Providers have questioned the value of providing consumers annual 
notices where the provider's privacy practices have not changed since 
the last notice, at least where the provider does not share information 
with other firms (or shares in narrow cases). Should there be an 
exception from the requirement to provide an annual privacy notice in 
these or any other circumstances?

ATM Fee Disclosure

    Under Regulation E, any person that operates an automated teller 
machine (ATM) that imposes a fee on any consumer for withdrawing funds 
or inquiring about a balance must disclose the amount of any fee the 
operator charges. The operator must disclose the fee on the ATM screen 
or in a paper notice before the consumer must pay a fee. In addition, 
the regulation requires the operator to post a sign on the ATM itself 
that fees ``will'' or ``may be imposed'' but does not require the sign 
to state the fee amount. 12 CFR 205.16(c). Should the requirement to 
post a sign be eliminated? Are other disclosures of ATM fees adequate 
to inform consumers?

Coverage/Scope of Regulation C (Home Mortgage Disclosure)

    Under Regulation C, a depository institution generally must 
collect, report, and disclose certain mortgage data if it originated or 
refinanced one home purchase loan in the preceding calendar year, its 
assets exceed a specified minimum, and it is located in a metropolitan 
statistical area. 12 CFR 203.2(e). As a result, some depository 
institutions that do not originate home purchase loans but occasionally 
refinance a home purchase loan as an accommodation for a customer are 
required to collect, report, and disclose mortgage data. Should 
depositories that make or refinance small numbers of loans be exempted? 
If so, what number of loans would be appropriate?

Coverage/Scope of Regulation B (Equal Credit Opportunity)

    Under Regulation B, all creditors that take applications for home 
purchase loans or refinancings of home purchase loans must request 
information about applicant characteristics such as race and ethnicity. 
12 CFR 202.913(a). Regulators can use these data to monitor compliance 
with fair lending obligations. Under Regulation C, some depository and 
other mortgage lending institutions are exempt from collecting 
applicant characteristic information based on factors such as location, 
size, and loan volume. 12 CFR 203.1(c), 203.2(e). Should Regulations B 
and C have a consistent exemption for data collection, or do the data 
collections serve different purposes justifying different scopes of 
coverage?
    Under Regulation B, all creditors that take action on applications 
for credit must timely notify applicants of the action. 12 CFR 
202.9(a). Should creditors that receive a small number of applications 
be exempted from this requirement? If so, what is the appropriate 
number of applications? Should the existence or size of an exemption 
vary based on type of product? If the Bureau adopted an exemption, what 
adjustments would it need to make to requirements for adverse action 
notices under the Fair Credit Reporting Act?

Coverage/Scope of Regulation Z (Truth in Lending)

    In general, Regulation Z covers a creditor if it extended consumer 
credit more than 25 times in the past calendar year (or more than 5 
times, for transactions secured by a dwelling). 12 CFR 226.2(a)(17)(v). 
Should these thresholds be raised? What would be an appropriate 
threshold? And should a similar exemption be applied to disclosure 
requirements under the Real Estate Settlement Procedures Act that the 
Bureau will integrate with Truth in Lending disclosure requirements?
    Regulation Z generally covers a creditor if it makes more than 25 
consumer loans in total of any type. Should different types of consumer 
credit have different thresholds? For example, should creditors be 
exempted from the student loan requirements if they made less than a 
certain number of student loans in the preceding calendar year, 
regardless of how many other consumer loans they made?

Ability To Pay Credit Card Debt

    Regulation Z requires credit card issuers, before extending credit, 
to assess the individual borrower's ability

[[Page 75829]]

to repay the loan. 12 CFR 226.51. This requirement is based on a 
provision of the Credit Card Accountability Responsibility and 
Disclosure Act of 2009 (Credit CARD Act), Public Law 111-24, 123 Stat. 
1734 (2009). Concern has been expressed by some card issuers and also 
some members of Congress that these rules may have the unintended 
consequence of precluding some individuals, especially non-working 
spouses, from obtaining credit they are capable of repaying. Should 
this section of Regulation Z be amended, and, if so, how?

Electronic Disclosures

    The inherited regulations require that certain disclosures, 
including periodic statements and receipts under Regulations E and Z, 
be provided to consumers in writing in a form that they may keep. The 
Electronic Signatures in Global and National Commerce Act (E-Sign Act) 
(15 U.S.C. 7001 et seq.) permits disclosures that must be provided in 
writing to be provided electronically if the provider meets certain 
requirements, including obtaining the consumer's consent. Some parts of 
the inherited regulations permit certain disclosures to be provided 
electronically or in writing. Should the Bureau permit other 
disclosures now required to be in writing to be delivered in electronic 
form?
    In addition, mobile banking has become more prevalent and widely 
used by consumers since the E-Sign Act was adopted. For mobile banking 
applications, should the Bureau consider allowing certain disclosures 
to be provided by text messaging, even though text messages are not 
readily retainable and, if so, under what circumstances and with what 
safeguards?

Interstate Land Sales Full Disclosure Act

    The Interstate Land Sales Full Disclosure Act (ILSA) (15 U.S.C. 
1701 et seq.) imposes reporting, disclosure, and anti-fraud protections 
on some interstate land sales. Commentators have questioned whether 
improvements in consumers' access to information about these sales 
warrant changes to reporting and disclosure requirements. They have 
also indicated that technological changes may warrant updates to the 
form and manner of reporting and disclosure. Changes in state property 
regulations in past decades may also warrant changes to ILSA 
regulations. For these or other reasons, what changes to implementing 
regulations, if any, should the Bureau make?

    Dated: November 29, 2011.
Raj Date,
Special Advisor to the Secretary of the Treasury on the Consumer 
Financial Protection Bureau.
[FR Doc. 2011-31030 Filed 12-2-11; 8:45 am]
BILLING CODE 4810-AM-P