CFPB Creates New Process for the Public to Petition for Rulemaking and Requires Use by Industry Lobbyists and Representatives
The Consumer Financial Protection Bureau (CFPB) announced today, February 16, 2022, that it is creating a more formal process for the public to submit petitions for rulemaking to the CFPB through its website. The petitions will be on a public docket and open for comment. Significantly, this new process could affect the current lobbying efforts of the industry. The CFPB stated that “former government employees and other individuals who are paid to influence the agency’s rulemaking agenda behind the scenes will be asked to submit their petition for public inspection instead.”
The Administrative Procedures Act (“APA”) section 553(e) currently provides that agencies must, “give an interested person the right to petition for the issuance, amendment, or repeal of a rule.” But the CFPB stated that it was creating this process to make it “easier for the public to meaningfully engage with the agency and request regulatory changes.” The CFPB’s Director Chopra stated that this broadens the public’s access to the agency’s rulemaking process. The CFPB stated that, “while members of the public have long had the ability to comment on rules and other initiatives, many individuals and small businesses believe that they must hire former government officials, lawyers, or lobbyists in order to be heard by an agency.” The CFPB stated that this process will make it easier for the public to submit rulemaking petitions.
The CFPB recommended that petitions include the following information:
· The petitioner’s contact information (full name, address, telephone number, email address)
· The type of action the petitioner is requesting (e.g., whether the CFPB should issue a new rule or repeal or amend an existing rule)
· The factual and legal reasons for the proposed action
· The expected effects the proposed action will have on relevant parties (e.g., consumers, industry, enforcement authorities)
Regarding the CFPB’s stated requirement that the industry use this public process, the CFPB stated, “former government employees and other individuals who are paid to influence the agency’s rulemaking agenda behind the scenes will be asked to submit their petition for public inspection instead.” The CFPB stated that this announcement is “part of a series of steps the CFPB is taking to ensure high standards of transparency and ethics, particularly when it comes to addressing the corrosive effects of the ‘revolving door.’” The CFPB then noted its prior November 2021 guidance to its staff regarding potential misconduct by former CFPB employees that may be misusing information they obtained while working in the government or otherwise violating ethics rules, which can be accessed here. An important question is how this new policy might affect general industry interactions with the CFPB regarding supervisory, enforcement, or other policy issues that could raise indirect questions about rulemaking issues. It would be prudent for the industry to pay attention to how the CFPB implements this policy.
You can access the CFPB’s press release and the CFPB’s new rulemaking petition website here.
Please contact me at rich@garrishorn.com to discuss any of the issues in this blog post, or for any assistance with submitting a rulemaking petition to the CFPB.
