The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

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The Consumer Financial Protection Bureau

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Summary

In the wake of the worst U.S. financial crisis since the Great Depression, Congress passed and the

President signed into law sweeping reforms of the financial services regulatory system through

the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), P.L. 111203. Title X of the Dodd-Frank Act is entitled the Consumer Financial Protection Act of 2010

(CFP Act). The CFP Act establishes the Bureau of Consumer Financial Protection (CFPB or

Bureau) within the Federal Reserve System (FRS) with rulemaking, enforcement, and

supervisory powers over many consumer financial products and services, as well as the entities

that sell them.

The CFP Act substantially, though not completely, consolidates in the CFPB federal consumer

protection powers that previously were held by seven other regulators. It has the authority to write

rules to implement a broad array of federal consumer financial protection laws, as well as most

consumer compliance supervisory and enforcement powers over larger depositories. However, the

CFPB did not acquire from the banking regulators the primary supervisory and enforcement

powers over smaller depositories. The Bureau also wields new federal consumer financial

protection powers to regulate nondepository financial institutions, which previously were largely

unregulated at the federal level. However, the CFP Act wholly exempts certain nondepository

financial institutions from the Bureau’s regulatory reach and curtails the CPFB’s authority to

regulate others.

Although the powers that the CFPB has at its disposal are largely the same or analogous to those

that other federal regulators have held for decades, there is a great deal of uncertainty in how the

new agency will exercise these broad and flexible authorities, especially in light of its almost

exclusive focus on consumer protection and the novel expansion of federal oversight to

nondepository financial institutions. This uncertainty has some anxious that the Bureau, in the

name of protecting consumers, may excessively restrict consumer credit and unduly increase

regulatory costs. As the Bureau continues to exercise its authorities, policy makers will have a

performance record on which to evaluate how the CFP Act is working and whether amendments

might improve consumer protections, increase access to credit markets, reduce the costs of

consumer financial products and services, or reduce compliance costs.

The 113th Congress has been actively involved in conducting oversight of the implementation of

the CFP Act. The 113th Congress also has considered bills that would either eliminate the CFPB

altogether or significantly alter the structure of the Bureau by, for example, making the CFPB’s

primary funding subject to the traditional appropriations process, converting the CFPB’s

leadership structure from a sole directorship to a commission, or allowing the Financial Stability

Oversight Council (FSOC) to overturn CFPB-issued regulations with a simple majority vote, as

opposed to the current supermajority vote.

This report provides an overview of the regulatory structure of consumer finance under existing

federal law before the Dodd-Frank Act went into effect and examines arguments for modifying

the regime in order to more effectively regulate consumer financial markets. It then analyzes how

the CFP Act changes that legal structure, with a focus on the Bureau’s organization; the entities

and activities that fall (and do not fall) under the Bureau’s supervisory, enforcement, and

rulemaking authorities; the Bureau’s general and specific rulemaking powers and procedures; and

the Bureau’s funding.

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Contents

Introduction...................................................................................................................................... 1

Federal Consumer Financial Protection Regulation Before the CFPB ............................................ 2

Arguments for Consolidating Federal Consumer Financial Regulatory Powers ....................... 5

“Regulatory Arbitrage” Resulted in a “Race-to-the-Bottom” ............................................. 5

Safety and Soundness Historically Have Trumped Consumer Compliance........................ 8

Overview of the Bureau ................................................................................................................... 9

Bureau’s Purpose and Structure ..................................................................................................... 11

General Powers .............................................................................................................................. 12

Covered Entities and Activities ............................................................................................... 13

Depositories With More Than $10 Billion in Assets ......................................................... 13

Depositories With $10 Billion or Less in Assets ............................................................... 15

Nondepository Financial Institutions ................................................................................ 16

Nondepository Institutions with Explicit Exemptions ...................................................... 18

Newly Established Rulemaking............................................................................................... 21

General Rulemaking Powers ............................................................................................. 21

Specific Rulemaking Powers ............................................................................................ 23

Rulemaking Under the Enumerated Consumer Laws ............................................................. 25

Funding .......................................................................................................................................... 26

Conclusion ..................................................................................................................................... 27

Contacts

Author Contact Information........................................................................................................... 28

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Introduction

In the wake of the worst U.S. financial crisis since the Great Depression, Congress passed and the

President signed into law sweeping reforms of the financial services regulatory system through

the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), P.L. 111203.

Title X of the Dodd-Frank Act is entitled the Consumer Financial Protection Act of 2010 (CFP

Act). The CFP Act establishes the Bureau of Consumer Financial Protection (CFPB or Bureau)

within the Federal Reserve System (FRS) with rulemaking, enforcement, and supervisory powers

over many consumer financial products and services, as well as the entities that sell them. The

CFP Act significantly enhances federal consumer protection regulatory authority over

nondepository financial institutions, potentially subjecting them to comparable supervisory,

examination, and enforcement standards that have been applicable to depository institutions in the

past. The act transfers to the Bureau much of the consumer compliance authority over larger

depositories that previously had been held by banking regulators.1 The law also transfers to the

Bureau the primary rulemaking authority over many federal consumer protection laws that, with

one exception,2 were enacted prior to the Dodd-Frank Act. These “enumerated consumer laws”3

include the Truth in Lending Act4 and the Real Estate Settlement Procedures Act of 1974.5

The CFP Act has proven to be one of the more controversial portions of the Dodd-Frank Act. The

113th Congress has been actively involved in conducting oversight of the implementation of the

CFP Act.6 The 113th Congress also has considered bills that would either eliminate the CFPB

altogether7 or significantly alter the structure of the Bureau by, for example, making the CFPB’s

primary funding subject to the traditional appropriations process,8 converting the CFPB’s

leadership structure from a sole directorship to a commission,9 or allowing the Financial Stability

Oversight Council (FSOC) to overturn CFPB-issued regulations with a simple majority vote, as

opposed to the current supermajority vote.10

For a discussion of the Bureau’s varying authorities over “larger” and “smaller” depository institutions, see the

“Covered Entities and Activities” section of this report below.

The Bureau acquired rulemaking authority pursuant to most provisions of the Mortgage Reform and Anti-Predatory

Lending Act, which was enacted as Title XIV of the Dodd-Frank Act. Dodd-Frank Act §1400.

Dodd-Frank Act §1002(12), 12 U.S.C. §5481(12).

15 U.S.C. §§1601, et seq.

12 U.S.C. §§2601, et seq.

The 113th Congress has conducted regular oversight of the CFPB. See, e.g., How Prospective and Current

Homeowners will be Harmed by the CFPB’s Qualified Mortgage Rule, Hearing Before the House Committee on

Financial Services, 113th Cong. (2014); The Consumer Financial Protection Bureau’s Semi-Annual Report to

Congress, Hearing Before the Senate Committee on Banking, Housing, and Urban Affairs, 113th Cong. (2013);

Examining Legislative Proposals to Reform the Consumer Financial Protection Bureau, Hearing Before the House

Committee on Financial Services, 113th Cong. (2013); The Semi-Annual Report of the Consumer Financial Protection

Bureau, Hearing Before the House Committee on Financial Services, 113th Cong. (2013).

See, e.g., S. 20, the Financial Takeover Repeal Act of 2013; H.R. 46, a bill to repeal the Dodd-Frank Wall Street

Reform and Consumer Protection Act.

See, e.g., H.R. 3519, the Bureau of Consumer Financial Protection Accountability and Transparency Act of 2013.

See, e.g., H.R. 2446, the Responsible Consumer Financial Protection Regulations Act of 2013.

See, e.g., H.R. 3193, the Consumer Financial Protection Safety and Soundness Improvement Act of 2013.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

This report provides an overview of the regulatory structure of consumer finance under existing

federal law before the Dodd-Frank Act went into effect and examines arguments for modifying

the regime in order to more effectively regulate consumer financial markets. It then analyzes how

the CFP Act changes that legal structure, with a focus on the Bureau’s organization; the entities

and activities that fall (and do not fall) under the Bureau’s supervisory, enforcement, and

rulemaking authorities; the Bureau’s general and specific rulemaking powers and procedures; and

the Bureau’s funding.

Federal Consumer Financial Protection Regulation

Before the CFPB

Before the CFP Act went into effect, which largely occurred on July 21, 2011 (called the

“designated transfer date”),11 the authority to write rules to implement the majority of the federal

consumer financial protection laws, the power to enforce these laws, and the supervisory

authority over the individuals and companies offering and selling consumer financial products

and services were predominately shared by five different banking regulators, as well as the

Federal Trade Commission (FTC) and the Department of Housing and Urban Development

(HUD). The jurisdiction of these regulators varied based on the type of institution involved and,

in some cases, based on the type of financial activities in which institutions engaged.

The authority of the five banking regulators varied based on depository charters. The Office of

the Comptroller of the Currency (OCC) supervised national banks; the Board of Governors of the

Federal Reserve System (FRB) supervised domestic operations of foreign banks and statechartered banks that were members of the FRS;12 the Federal Deposit Insurance Corporation

(FDIC) supervised state-chartered banks and other state-chartered banking institutions that were

not members of the FRS;13 the National Credit Union Administration (NCUA) supervised

federally insured credit unions; and the Office of Thrift Supervision (OTS)14 supervised federal

savings and loan associations and thrifts.15 The five banking regulators were charged with the

two-pronged mandate of regulating for both safety and soundness, as well as consumer

compliance. Safety and soundness regulation, also referred to as prudential regulation, consists of

ensuring that institutions are managed in a safe and sound manner so as to maintain profitability

and avoid failure.16 The focus of consumer compliance regulation, on the other hand, is ensuring

that institutions are in compliance with applicable consumer protection and fair lending laws.17

Designated Transfer Date, 75 Fed. Reg. 57,252 (Sept. 20, 2010).

The FRB also supervised bank holding companies.

The FDIC, which administers the Deposit Insurance Fund, also has certain regulatory powers over state and federal

depositories holding FDIC-insured deposits; however, these authorities generally are secondary to the institution’s

primary federal regulator. See, e.g., 12 U.S.C. §1820.

The Dodd-Frank Act eliminated the OTS and transferred its powers to the OCC, FDIC, FRB, and CFPB. Dodd-Frank

Act, Title III.

OTS also supervised thrift holding companies.

Heidi Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18

Loy. Consumer L. Rev. 43, 52-53 (2005).

Id. at 50, 54-55.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

To reach these ends, the banking regulators were provided with broad authority to subject banks,

credit unions, and thrifts (which this report will collectively refer to as “depository institutions” or

“depositories”) to up-front regulatory standards, such as maintaining minimum capital levels,

through regulations, orders, and guidelines. These regulators also were given strong supervisory

powers, including the authority to perform on-site examinations of depositories,18 and flexible

enforcement powers to rectify problems found during the course of their supervision.19 These

supervisory powers gave banking regulators at least the potential to catch problems before they

caused significant harm to consumers, counterparties, and the depositories themselves.

Additionally, consumer compliance issues often were dealt with informally and confidentially as

part of the examination process, rather than through public, ex post formal enforcement orders.20

The Federal Trade Commission (FTC) was the primary federal regulator for nondepository

financial institutions, such as payday lenders and mortgage brokers.21 Unlike the federal banking

regulators, the FTC had little up-front supervisory or enforcement authority. The FTC’s powers

generally were limited to ex post enforcement. Thus, the FTC did not have the statutory authority

to regularly examine nondepository financial institutions or impose reporting requirements on

them as a way to proactively ensure they were complying with consumer protection laws. The

FTC also did not have any direct safety and soundness authority over institutions.22 Instead,

nondepository financial institutions were primarily supervised by state regulators. The powers

granted to state regulators and the level of supervision these regulators provided varied

considerably from state to state.

In addition to institution-based distinctions, both depository and nondepository financial

institutions also were subject to the restrictions of federal consumer financial protection laws.

These federal laws each regulate specific types of consumer products and activities. For example,

the Truth in Lending Act (TILA)23 requires disclosures regarding the terms and conditions

All depositories generally must be examined at least once every 18 months, but the largest depositories have

examiners on-site on a continuous basis. See, e.g., 12 U.S.C. §1820(d).

12 U.S.C. §§1818 and 1831o.

See, e.g., Office of the Comptroller of the Currency, Comptroller’s Handbook for Bank Supervision Process, pp. 4647 (2007), available at http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/_pdf/

banksupervisionprocess.pdf; Bd. of Governors of the Fed. Reserve Sys., Commercial Bank Examination Manual

§5040.1 (2011), available at http://federalreserve.gov/boarddocs/supmanual/supervision_cbem.htm. See, also, In re

Subpoena Served upon Comptroller of Currency, 967 F.2d 630, 633-634 (D.C. Cir. 1992) (discussing the bank

examination privilege: “Bank safety and soundness supervision is an iterative process of comment by the regulators and

response by the bank. The success of the supervision therefore depends vitally upon the quality of communication

between the regulated banking firm and the bank regulatory agency. This relationship is both extensive and informal. It

is extensive in that bank examiners concern themselves with all manner of a bank’s affairs: Not only the classification

of assets and the review of financial transactions, but also the adequacy of security systems and of internal reporting

requirements, and even the quality of managerial personnel are of concern to the examiners. The supervisory

relationship is informal in the sense that it calls for adjustment, not adjudication. In the process of comment and

response, the bank may agree to change some aspect of its operation or accounting; alternatively, if the bank and the

examiners reach impasse, then their dispute may be elevated for resolution at higher levels within the bank regulatory

agency. It is the very rare dispute, however, that culminates in any formal action, such as a cease and desist order.”

(internal citations omitted)).

The FTC also serves as the primary federal regulator for many non-financial commercial enterprises.

Heidi Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18

Loy. Consumer L. Rev. 43, 56-58 (2005). See also Fed. Trade Comm’n Operating Manual, Ch. 1, available at

http://www.ftc.gov/about-ftc/foia/foia-resources/ftc-administrative-staff-manuals.

15 U.S.C. §§1601, et seq.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

associated with extensions of consumer credit; the Equal Credit Opportunity Act (ECOA)24 bans

certain kinds of discrimination in consumer lending; the Real Estate Settlement Procedures Act of

1974 (RESPA)25 imposes disclosure requirements and fee restrictions associated with home loan

settlements; the Truth in Savings Act (TISA)26 requires disclosures regarding the terms and

conditions of consumer deposit accounts; and the Fair Debt Collection Practices Act (FDCPA)27

restricts third-party debt collection activities.28

Individually, these enumerated consumer laws target discrete activities. Taken as a whole, they

govern a broad and diverse set of consumer activities and services.29 Before the Dodd-Frank Act

went into effect, the rulemaking authority to implement federal consumer financial protection

laws was largely held by the FRB.30 The authority to enforce the federal consumer financial

protection laws and regulations, however, was spread among all of the banking regulators, the

FTC, and HUD.31

In short, the banking regulators held both prudential and consumer compliance supervisory and

enforcement powers over depository institutions. Although they had the authority to take ex post

enforcement actions, the banking regulators placed a great deal of emphasis on ex ante regulation

and supervision. The FTC was the primary regulator of nondepository financial institutions. The

FTC’s authority was much more limited than that of the banking regulators. Its authority was

almost exclusively limited to ex post enforcement.32 Additionally, both depositories and

nondepository financial institutions were required to comply with the various federal consumer

financial laws and the regulations issued under those laws. The rulemaking authority under the

federal consumer financial laws was predominately held by the FRB, but the authority to enforce

those laws and regulations was spread among all the banking regulators, as well as the FTC and

HUD.33

15 U.S.C. §§1691, et seq.

12 U.S.C. §§2601, et seq.

12 U.S.C. §§4301, et seq.

15 U.S.C. §§1692, et seq.

Other federal consumer protection laws include the Consumer Leasing Act of 1976 (15 U.S.C. §§1667 et seq.),

which requires certain disclosures for consumer leases; the Electronic Funds Transfer Act (15 U.S.C. §§1693 et seq.),

which establishes consumer protections regarding electronic fund transfers; the Fair Credit Billing Act (15 U.S.C.

§§1666, et seq.), which establishes consumer protections regarding billing errors associated with extensions of credit;

and the Fair Credit Reporting Act (15 U.S.C. §§1681, et seq.), which governs consumer credit histories and data

collection.

Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 83-85 (Nov. 2008). The

activities and services that are covered by the enumerated consumer laws include debt collection practices; debit card

transfers; overdraft services; consumer leases; mortgage lending; credit card lending; mortgage appraisals; real estate

settlement practices; and credit reporting.

To a lesser extent, other agencies held rulemaking authority under federal consumer laws. For example, rulemaking

authority under RESPA was held by HUD.

Heidi Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18

Loy. Consumer L. Rev. 43, 56-58 (2005); Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn.

L. Rev. 1, 86-97 (Nov. 2008).

Id. See also Fed. Trade Comm’n Operating Manual, Ch. 1, available at http://www.ftc.gov/about-ftc/foia/foiaresources/ftc-administrative-staff-manuals.

Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 94-97 (Nov. 2008).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Arguments for Consolidating Federal Consumer Financial

Regulatory Powers

Scholars and consumer advocates argued that the complex, fragmented federal consumer

financial protection regulatory system in place before the Dodd-Frank Act failed to adequately

protect consumers and created market inefficiencies to the detriment of both financial institutions

and consumers. Some argued that these problems could be corrected if all federal consumer

financial regulatory powers were consolidated in a single regulator with a consumer focus.34 As

discussed below, proponents of change generally raised two primary criticisms of the pre-DoddFrank Act regulatory system. One was that it allowed financial institutions to engage in

“regulatory arbitrage,” which pressured regulators to lower supervisory standards in a so-called

“race-to-the-bottom.”35 The other was that banking regulators tended to place greater emphasis on

their safety and soundness duties, at the expense of their consumer compliance responsibilities.36

“Regulatory Arbitrage” Resulted in a “Race-to-the-Bottom”

“Regulatory arbitrage,” that is, a financial institution’s ability to take advantage of regulatory

loopholes or permissive supervisory oversight, arguably resulted from three forms of

competition—competition between depositories and nondepositories; competition among the

various types of depository charters (e.g., state charter versus federal charter; bank charter versus

thrift charter); and competition among the financial regulators.37 These competitive pressures

See, e.g., Heidi Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer

Credit, 18 Loy. Consumer L. Rev. 43, 82 (2005) (“The most sensible approach to correcting the structural defect in the

current regime would be to eliminate entirely the federal banking regulators’ role in consumer protection. This

approach has the potential to enhance both the fairness and the efficiency of the current system. This proposal would

create a more fair system because banks and non-banks would be treated alike. This would level the playing field

among providers of similar financial services. In addition, this proposal provides many potential efficiencies that derive

from the recognition of consumer protection as a distinct regulatory goal from prudential regulation.”); Oren Bar-Gill

and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 98-100 (Nov. 2008).

Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal Reserve: Hearing Before

the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th Cong. (2009) (written

testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen M. England Professor

of Law at the University of Connecticut School of Law), available at http://archives.financialservices.house.gov/media/

file/hearings/111/mccoy_house_testimony—hearing—july_16_2009.pdf; Adam J. Levitan, The Consumer Financial

Protection Agency, The PEW Financial Reform Project Briefing Paper # 3, pp. 6-7 (2009), available at

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/Pew-Levitan-CFPA.pdf; Oren

Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 82-84 (Nov. 2008).

Adam J. Levitan, The Consumer Financial Protection Agency, The PEW Financial Reform Project Briefing Paper #

3, p. 4 (2009), available at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/PewLevitan-CFPA.pdf; Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 90 (Nov.

2008); Heidi Mandanis Schooner, The Role of Central Banks in Bank Supervision in the United States and the United

Kingdom, 28 Brook. J. of Int’l L 411, 427 (2003) (“the Federal Reserve’s ... regulatory role remains focused on safety

and soundness and not on other goals of financial regulation, such as consumer protection.”).

Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal Reserve: Hearing Before

the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th Cong. (2009) (written

testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen M. England Professor

of Law at the University of Connecticut School of Law), available at http://financialservices.house.gov/media/file/

hearings/111/mccoy_house_testimony—hearing—july_16_2009.pdf; Adam J. Levitan, The Consumer Financial

Protection Agency, The PEW Financial Reform Project Briefing Paper # 3, pp. 6-7 (2009), available at

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/Pew-Levitan-CFPA.pdf; Oren

Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 82-84 (Nov. 2008).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

were fueled by the fact that there is considerable overlap in the types of consumer products and

services that are offered by state and federal depositories, as well as by nondepository institutions.

However, since these institutions had different federal regulators, they could be subject to very

different regulatory regimes.38

Some believed that the more costly supervisory burdens of depositories gave nondepositories a

competitive advantage over depository institutions in certain consumer markets.39 The general

discrepancy may have encouraged banking regulators to lower their supervisory standards as a

way to help depositories under their jurisdictions more effectively compete with

nondepositories.40

Banking regulators may have been further pressured to relax regulatory scrutiny because of the

threat that depositories would change their charters. Although there were significant distinctions

between the various depository charters historically, statutory changes over the years have

eliminated many of those differences.41 As a result, many depositories could change their charters

without having to significantly alter their business practices.42 One of the few remaining

differences was that the depository charters determined an institution’s primary regulator. Thus,

an influencing factor in an institution’s chartering decision could be the characteristics of the

regulator associated with a particular charter. Financial institutions may be incentivized to switch

their charters in order to be supervised by the agency with the lightest, least costly regulatory

touch.43

Id.

Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal Reserve: Hearing Before

the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th Cong. (2009) (written

testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen M. England Professor

of Law at the University of Connecticut School of Law), available at http://financialservices.house.gov/media/file/

hearings/111/mccoy_house_testimony--hearing--july_16_2009.pdf; Heidi Mandanis Schooner, Consuming Debt:

Structuring the Federal Response to Abuses in Consumer Credit, 18 Loy. Consumer L. Rev. 43, 82 (2005).

See, e.g., Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal Reserve:

Hearing Before the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th Cong.

(2009) (written testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen M.

England Professor of Law at the University of Connecticut School of Law), available at

http://financialservices.house.gov/media/file/hearings/111/mccoy_house_testimony--hearing--july_16_2009.pdf (“This

dual regulatory system allowed mortgage lender to play regulators off one another by threatening to change charters.

Mortgage lenders are free to operate with or without depository institution charters. Similarly, depository institutions

can choose between a state and federal charter and between a thrift charter and a commercial bank charter. Each of

these choices allows a lender to change regulators. A lender could escape a strict state law by switching to a federal

bank or thrift charter or by shifting its operations to a less regulated state. Similarly, a lender could escape a strict

regulator by converting its charter to one with a more accommodating regulator.”). See, also, Heidi Mandanis

Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18 Loy. Consumer L.

Rev. 43, 82 (2005). It should be noted, however, that depositories receive benefits that generally are not available to

nondepositories, and these benefits may offset the distinctions in regulatory burdens, to some degree. These benefits

include federal deposit insurance and access to the Federal Reserve’s discount window lending facility. 12 U.S.C.

§§1815 (deposit insurance), 343 (discount window).

Dain C. Donelson and David Zaring, Charter Switching and the Financial Crisis: Evidence from the Office of Thrift

Supervision, pp. 11-18 (Oct. 13, 2009) (unpublished paper for the Illinois Corporate Law Symposium), available at

http://www.law.illinois.edu/_shared/pdfs/thrift%20chartering%20draft%2010%20dz.docx.

Id. at 8 (“From 1998-2008, OTS lost a net 45 institutions as more thrifts converted to banks than did banks to thrifts.

Moreover, some financial institutions have left the federal system altogether. Between 2000 and 2008, at least 30

financial institutions gave up their federal charters and obtained state charters.” (internal citations omitted)). See, also,

Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 82-84 (Nov. 2008).

The Financial Crisis Inquiry Report, Fin. Crisis Inquiry Comm’n, p. xviii, Jan. 2011, available at

(continued...)

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Banking regulators also had a financial incentive to attract institutions to their charters and to

ensure the happiness of institutions already within their supervisory jurisdictions because a

significant portion of their budgets derive from assessments against the institutions under their

supervision.44 As a result, if one banking regulator lowered its regulatory standards as a way to

encourage financial institutions to change their charters, the others may have been pressured to

respond in kind.45

Some argued that these competitive forces placed downward pressure on regulators, which led to

a “race-to-the-bottom.”46 Therefore, some proposed consolidating consumer compliance

regulatory authority in a single agency as a means to level the regulatory playing field for

depositories and nondepository financial institutions, thus stifling the competitive pressures that

(...continued)

http://www.gpo.gov/fdsys/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf; Dain C. Donelson and David Zaring, Charter Switching

and the Financial Crisis: Evidence from the Office of Thrift Supervision, pp. 4-5 (Oct. 13, 2009) (unpublished paper for

the Illinois Corporate Law Symposium), available at http://www.law.illinois.edu/_shared/pdfs/

thrift%20chartering%20draft%2010%20dz.docx (“We also observe that those institutions that switched their charter to

OTS during the period of our study had, because of the way the differences between the bank charter and the thrift

charter dissipated over time, probably only did so because they preferred being regulated by OTS, rather than because

they preferred the business model legislatively required of thrifts (non-thrifts could pursue that model without any legal

deficiency or cost).”); Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal

Reserve: Hearing Before the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th

Cong. (2009) (written testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen

M. England Professor of Law at the University of Connecticut School of Law), available at

http://financialservices.house.gov/media/file/hearings/111/mccoy_house_testimony--hearing--july_16_2009.pdf; Adam

J. Levitan, The Consumer Financial Protection Agency, The PEW Financial Reform Project Briefing Paper # 3, pp. 6-7

(2009), available at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/PewLevitan-CFPA.pdf; Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 93-94 (Nov.

2008).

See, e.g., Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 93-94 (Nov. 2008)

(“The OCC’s inaction may also be attributable, at least in part, to its direct financial stake in keeping its bank clients

happy. Large national banks fund a significant portion of the OCC’s budget. ... By attracting more financial-services

companies to incorporate as federally chartered banks under the supervision of the OCC, the agency can expand its

influence. Accordingly, the OCC would be reluctant to impose substantial constraints on banks, fearing that such

constraints might induce the banks to switch to a competing regulator.” (internal citations omitted)). See, also, Adam J.

Levitan, The Consumer Financial Protection Agency, The PEW Financial Reform Project Briefing Paper # 3, pp. 6-7

(2009), available at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/PewLevitan-CFPA.pdf.

At least one scholar believes that “regulatory arbitrage” was the primary reason why Countrywide, N.A., the bank

subsidiary of what was once the largest mortgage lender in the country, converted from an OCC-regulated national

bank to an OTS-regulated thrift in 2007.See, e.g., Regulatory Restructuring- Safeguarding Consumer Protection and

the Role of the Federal Reserve: Hearing Before the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm.

on Fin. Servs., 111th Cong. (2009) (written testimony of Patricia A. McCoy, Director of the Insurance Law Center and

George J. and Helen M. England Professor of Law at the University of Connecticut School of Law), available at

http://financialservices.house.gov/media/file/hearings/111/mccoy_house_testimony--hearing--july_16_2009.pdf. After

the charter conversion, Countrywide, N.A. became Countrywide, F.S.B. Countrywide Financial Corporation, the parent

company of Countrywide, F.S.B., has since been acquired by Bank of America, Corporation. See, the historical bank

profile of Countrywide, N.A., available at http://www2.fdic.gov/idasp/main.asp.

Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal Reserve: Hearing Before

the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th Cong. (2009) (written

testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen M. England Professor

of Law at the University of Connecticut School of Law), available at http://financialservices.house.gov/media/file/

hearings/111/mccoy_house_testimony--hearing--july_16_2009.pdf; Adam J. Levitan, The Consumer Financial

Protection Agency, The PEW Financial Reform Project Briefing Paper # 3, pp. 6-7 (2009), available at

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/Pew-Levitan-CFPA.pdf; Oren

Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 98 (Nov. 2008).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

fueled the “race-to-the-bottom” and “regulatory arbitrage” to the benefit of both consumers and

financial institutions.47

Safety and Soundness Historically Have Trumped Consumer Compliance

The second major criticism of the federal consumer financial protection regulatory system before

the Dodd-Frank Act was that no federal agency had both the mission and legal authority to

effectively regulate consumer markets.48 The banking regulators had the statutory powers to

protect consumers; however, it has been argued that the banking regulators placed more

importance on their safety and soundness mission than on their consumer protection duties.

Scholars have noted that the banking regulators view their primary mission as protecting the

safety and soundness of banks, not protecting consumers.49 A heightened focus on safety and

soundness arguably caused regulators to turn a blind eye toward practices that may have been

detrimental to consumers if those practices were profitable for banks. A safety and soundnesscentric mission also may have hampered the banking regulators’ ability to hire and retain staff

with expertise in consumer products and consumer behavior.50

The FTC, on the other hand, did have a consumer focus. However, the FTC’s statutory authority

prevented it from conducting ex ante supervision of nondepositories and from regulating

depositories altogether.51 Some argued that these statutory constraints precluded the FTC from

sufficiently protecting consumers and eliminating consumer financial market inefficiencies.52

In a law review article on the subject, Professors Warren and Bar-Gill summed up these

arguments this way:

Effective regulation requires both authority and motivation. Yet none of the many regulators

in the consumer credit field satisfies these basic requirements. Federal banking regulators

Regulatory Restructuring- Safeguarding Consumer Protection and the Role of the Federal Reserve: Hearing Before

the Subcomm. on Domestic Monetary Policy & Tech. of the H. Comm. on Fin. Servs., 111th Cong. (2009) (written

testimony of Patricia A. McCoy, Director of the Insurance Law Center and George J. and Helen M. England Professor

of Law at the University of Connecticut School of Law), available at http://financialservices.house.gov/media/file/

hearings/111/mccoy_house_testimony--hearing--july_16_2009.pdf; Adam J. Levitan, The Consumer Financial

Protection Agency, The PEW Financial Reform Project Briefing Paper # 3, pp. 7-8 (2009), available at

http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/Pew-Levitan-CFPA.pdf; Oren

Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 98-100 (Nov. 2008).

Adam J. Levitan, The Consumer Financial Protection Agency, The PEW Financial Reform Project Briefing Paper #

2008); Heidi Mandanis Schooner, The Role of Central Banks in Bank Supervision in the United States and the United

Kingdom, 28 Brook. J. of Int’l L 411, 427 (2003) (“the Federal Reserve’s ... regulatory role remains focused on safety

and soundness and not on other goals of financial regulation, such as consumer protection.”).

Id.

Adam J. Levitan, The Consumer Financial Protection Agency, The PEW Financial Reform Project Briefing Paper #

3, p. 5 (2009), available at http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Financial_Reform/PewLevitan-CFPA.pdf.

Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 95-97 (Nov. 2008); Heidi

Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18 Loy.

Consumer L. Rev. 43, 56-58 (2005).

Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 95-97 (Nov. 2008); Heidi

Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18 Loy.

Consumer L. Rev. 43, 82-83 (2005).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

have the authority but not the motivation. For each federal banking agency, consumer

protection is not first (or even second) on its priority list. By contrast, the FTC makes

consumer protection a priority, but it enjoys only limited authority over consumer credit

markets.53

Thus, they were among those who argued that consumer markets could be effectively regulated if

a federal agency was established with both a consumer protection focus and strong supervisory,

enforcement, and rulemaking powers.

Overview of the Bureau

The CFP Act significantly alters the consumer financial protection landscape by consolidating

rulemaking authority and, to a lesser extent, supervisory and enforcement authority in one

regulator—the CFPB. The CFP Act empowers the Bureau through the transfer of existing

consumer protection powers from other federal regulators and the establishment of heightened

consumer protection authorities not previously held by federal regulators. The Bureau has

jurisdiction over an array of consumer financial products and services, and it serves as the

primary federal consumer financial supervisor of many of the institutions that offer these products

and services. However, at least six other agencies—the OCC, FRB, FDIC, NCUA, FTC, and

HUD—will continue to hold some consumer protection powers at the federal level.

The CFP Act also imposes certain limitations on the Bureau’s authority to regulate various types

of financial institutions and financial activities. Several fundamental policy questions arose

consistently during the legislative debate over proposals that ultimately became the CFP Act.

These policy questions seem to be the primary motivations for the exceptions to the consolidation

of consumer protection power in the CFPB and the various restraints on the Bureau’s authorities.

One policy question was how best to balance the safety and soundness regulation of depositories

with that of consumer compliance. There is considerable overlap between prudential and

consumer compliance regulation.54 For instance, a mortgage that the borrower is unable to fully

repay is typically bad for both the borrower and the lender. The borrower runs the risk of damage

to her credit score and the loss of her home. The lender may suffer from lost interest income and

increased costs associated with the foreclosure process. However, there are some areas in which

there can be a conflict between safety and soundness regulation and consumer protection. When a

banking activity is profitable, safety and soundness regulators tend to look upon it favorably

because it enables the bank to meet capital requirements and withstand financial shocks. A

consumer protection regulator, on the other hand, may look at such activity less favorably if the

profit is seen to have been gained unfairly or deceptively at the expense of consumers.55

A related question that surfaced frequently during the legislative debate is the extent to which

large and small financial institutions should be treated differently in the regulatory structure.56

Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 85-86 (Nov. 2008).

Heidi Mandanis Schooner, Consuming Debt: Structuring the Federal Response to Abuses in Consumer Credit, 18

Loy. Consumer L. Rev. 43, 62-63 (2005).

Id. at 67-69; Oren Bar-Gill and Elizabeth Warren, Making Credit Safer, 157 U. of Penn. L. Rev. 1, 90-94 (Nov.

2008).

See, e.g., October 2, 2009, Discussion Draft of the Over-the-Counter Derivatives Markets Act of 2009; September

25, 2009, Discussion Draft of the Consumer Financial Protection Agency Act of 2009 (to be reported as H.R. 3126);

(continued...)

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Whereas the largest depository institutions are accustomed to having examiners on-site

continuously, examinations may be more disruptive for smaller depositories.57 Enhanced

compliance costs also are likely to more significantly impact smaller depositories, with their

lower aggregate revenues, than larger depositories. Similar arguments could be made for large

versus small nondepository financial institutions. Additionally, when assessing the causes of the

recent financial crisis, many tend to place more blame on this country’s large financial institutions

than on smaller ones.58 Thus, one could argue that the larger institutions should be subject to

greater, more costly regulation than smaller institutions. On the other hand, the goal of the DoddFrank Act appears to be geared not just toward eliminating the exact causes of the recent financial

crisis, but also toward preventing future crises.

Another issue that the legislative drafters of the CFP Act had to grapple with is that there is not

always a clear delineation between financial and nonfinancial goods, services, and providers in

the marketplace. For example, a clothing store’s main line of business likely is selling clothes and

shoes, so it may seem that a consumer financial regulator would have no regulatory role over it.

However, most clothing retailers do rely on financial services to maintain their businesses. They

usually accept credit cards and debit cards as a form of payment. Many clothing stores team with

financial institutions to offer credit cards that provide store rewards for using the card. Clothing

retailers also commonly offer electronic gift cards. Additionally, some clothing stores may

directly offer financing options for the purchase of their merchandise. As a result, defining the

scope of the Bureau’s authority required careful consideration. In some instances, the act uses

rigid, bright-line rules that provide considerable certainty as to where the Bureau’s authorities

begin and end. In other instances, the CFP Act imposes subjective standards intended to give the

CFPB the flexibility to evolve with consumer financial markets, but that also create the potential

that the Bureau will overreach by regulating beyond congressional intent.

Apparently as a result of the policy considerations outlined above, the act’s allocation of

regulatory authority among the prudential regulators and the CFPB varies based on institution

size and type. Regulatory authority differs for (1) depository institutions with more than $10

billion in assets (i.e., “larger depositories”); (2) depository institutions with $10 billion or less in

assets (i.e., “smaller depositories”); and (3) nondepositories. The Dodd-Frank Act also explicitly

(...continued)

H.R. 3763, to amend the Fair Credit Reporting Act to provide for an exclusion from Red Flag Guidelines for certain

businesses; and H.R. 3639, Expedited CARD Reform for Consumers Act of 2009, Markup of the H. Comm. on Fin.

Services, 111th Cong. (2009), webcasts available at http://archives.financialservices.house.gov/Hearings/

hearingDetails.aspx?NewsID=801.

Sarah Bloom Raskin, Gov., Bd. of Gov. of the Fed. Reserve Sys., Community Bank Examination and Supervision

amid Economic Recovery, speech at the Maryland Bankers Association First Friday Economic Outlook Forum, Jan. 6,

2012, available at http://www.federalreserve.gov/newsevents/speech/raskin20120106a.pdf; FDIC Oversight:

Examining and Evaluating the Role of the Regulator During the Financial Crisis and Today, Hearing Before the

Subcomm. on Fin. Inst. and Consumer Credit of the H. Comm. on Fin. Serv., 112th Cong. (2011) (written statement of

Sheila C. Bair, Chairman, Fed. Deposit Ins. Corp.), available at http://financialservices.house.gov/UploadedFiles/

052611bair.pdf.

See, e.g., Ben S. Bernanke, Chairman, Bd. of Gov. of the Fed. Reserve Sys., The Financial Crisis and Community

Banking, speech at the Independent Community Bankers of America’s National Convention and Techworld, Mar. 20,

2009, available at http://www.federalreserve.gov/newsevents/speech/bernanke20090320a.htm (“Many of you likely are

frustrated, and rightfully so, by the impact that the financial crisis and economic downturn has had on your banks, as

well as on the reputation of bankers more generally. You may well have built your reputations and institutions through

responsible lending and community-focused operations, but nonetheless, you now find yourselves facing higher deposit

insurance assessments and increasing public skepticism about the behavior of bankers—outcomes that you perceive

were largely caused by the actions of larger financial institutions.”)

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

exempts a number of different entities and consumer financial activities from the CFPB’s

supervisory, enforcement, and rulemaking authorities.

Consequently, compliance costs and the extent to which the cost and availability of credit will be

affected by the new regulator will depend on the type of institution that is providing consumer

financial products and services, as well as exactly how the Bureau wields its powers and how

aggressively it (and other state and federal regulators) enforces consumer protection laws and

regulations.

The breadth of the CFPB’s supervisory, enforcement, and rulemaking powers is similar to that of

the banking regulators. The banking regulators, however, have held those authorities for decades,

thus establishing a degree of certainty in the industry as to how those powers will be exercised.

The fact that the CFPB does not have a similar history, coupled with the Bureau’s overarching

focus on consumers, as opposed to safety and soundness, and its potential to oversee a large

number of nondepository financial institutions that largely were unregulated at the federal level

have some anxious that the Bureau will overreach in exercising its powers and, as a consequence,

excessively restrict consumer credit and unduly increase regulatory costs.59

Bureau’s Purpose and Structure

The stated goal of the Bureau is to:

implement and, where applicable, enforce Federal consumer financial law consistently for

the purpose of ensuring that all consumers have access to markets for consumer financial

products and services and that markets for consumer financial products and services are fair,

transparent, and competitive.60

The Bureau is established within the FRS, but it has considerable independence from the FRB.

For instance, the FRB does not have the formal authority to stop, delay, or disapprove of a Bureau

regulation, nor can it:

(A) intervene in any matter or proceeding before the Director [of the CFPB], including

examinations or enforcement actions, unless otherwise specifically provided by law;

(B) appoint, direct, or remove any officer or employee of the Bureau; or

Bureau, with any division or office of the Board of Governors or the Federal reserve banks.61

See, e.g., McConnell, 42 Senators Demand Accountability and Transparency at the Consumer Financial Protection

Bureau, Republican Leader Mitch McConnell, Press Release, Feb. 1, 2013, available at

http://www.mcconnell.senate.gov/public/index.cfm?p=PressReleases&ContentRecord_id=c3127ed5-4e30-4d82-a8350f3e1a8d1465&ContentType_id=c19bc7a5-2bb9-4a73-b2ab-3c1b5191a72b&Group_id=0fd6ddca-6a05-4b26-8710a0b7b59a8f1f.

Dodd-Frank Act §1021, 12 U.S.C. §5511.

Dodd-Frank Act §1012, 12 U.S.C. §5492. The Chairman of the FRB, however, does serve as a voting member of the

Financial Stability Oversight Council (FSOC) that has the authority to stay and overturn certain regulations issued by

the Bureau. Dodd-Frank Act §111, 12 U.S.C. §5321(b). For a more detailed discussion of the FSOC’s authority over

CFPB regulations, see the “General Rulemaking Powers” section of this report.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

The Bureau’s authorities are concentrated within a single Director, rather than in a board or

commission. The Director is to be appointed by the President, subject to the advice and consent of

the Senate, to serve for a five-year term from which he could only be removed for “inefficiency,

neglect of duty or malfeasance in office.”62 The Director has authority to hire the employees

necessary to carry out the duties of the Bureau63 and to delegate powers to employees.64 This

structure insulates the Bureau from the Office of the President and allows the Director to steer the

course of the CFPB. The Bureau’s structure is similar to that of the OCC, which is established

within the Department of the Treasury and is headed by a single individual, the Comptroller of

the Currency.65

The law requires the Director to establish units within the Bureau to focus on consumer financial

research; to provide guidance and technical assistance to traditionally underserved areas and

individuals; and to monitor and to respond to consumer complaints. The act also requires the

establishment of an Office of Fair Lending and Equal Opportunity; an Office of Financial

Education; an Office of Service Member Affairs directed toward members of the military and

their families; an Office of Financial Protection for Older Americans to, among other things,

“facilitate the financial literacy of individuals who have attained the age of 62 years or more ... on

protection from unfair, deceptive, and abusive practices on current and future financial choices”;66

and a Private Education Loan Ombudsman to, among other things, study and attempt to resolve

complaints raised by private education loan borrowers.67

General Powers

The authorities of the Bureau fall into three broad categories: supervisory, which includes the

power to examine and to impose reporting requirements on financial institutions; enforcement of

various consumer protection laws and regulations; and rulemaking. Some of these powers are

newly established by the Dodd-Frank Act, such as the authority to supervise certain

nondepository financial institutions. A significant portion of the Bureau’s powers was transferred

from other regulators to the Bureau, including the authority to prescribe regulations under the

enumerated consumer laws.

Dodd-Frank Act §1011, 12 U.S.C. §5491.

Dodd-Frank Act §1013, 12 U.S.C. §5493.

Dodd-Frank Act §1012, 12 U.S.C. §5492.

12 U.S.C. §1. The Comptroller of the Currency also serves for a five-year term and may be “removed by the

President, upon reasons to be communicated by him to the Senate.” 12 U.S.C. §2. The Federal Housing Finance

Agency, the regulator of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, also is headed by a single

director. 12 U.S.C. §4512. Other financial regulators are set up as commissions or boards. These include the FDIC (12

U.S.C. §1812), the Securities and Exchange Commission (15 U.S.C. §78d), the FTC (15 U.S.C. §41), the FRB (12

U.S.C. §241), and the NCUA (12 U.S.C. §1725a). See, also, Senate Report No. 111-176, p. 161 (2010) (explaining that

the CFPB’s executive and administrative structures “are modeled on similar statutes governing the Office of the

Comptroller of the Currency and the Office of Thrift Supervision, which are located within the Department of the

Treasury.”) (The Dodd-Frank Act eliminated the Office of Thrift Supervision and transferred its powers to the OCC,

FDIC, FRB, and CFPB. Dodd-Frank Act, Title III.).

Dodd-Frank Act §1013, 12 U.S.C. §5493.

Dodd-Frank Act §1035, 12 U.S.C. §5535.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Covered Entities and Activities

Under the CFP Act, the Bureau has authority over an array of consumer financial products and

services, including deposit taking, mortgages, credit cards and other extensions of credit, loan

servicing, check guaranteeing, collection of consumer report data, debt collection associated with

consumer financial products and services, real estate settlement, money transmitting, and

financial data processing.68 The Bureau also has authority over “service providers,” that is,

entities that provide “a material service to a covered person in connection with the offering or

provision of a consumer financial product or service.”69

While the breadth of the products, services, and entities that fall within the Bureau’s jurisdiction

is considerable, the CFP Act imposes some important exceptions to and limitations on the CFPB’s

rulemaking, enforcement, and supervisory powers. In some instances, the CFP Act clearly defines

the institutions that the Bureau may regulate.70 In other cases, the statutory language establishes

less objective standards that provide the CFPB a fair amount of discretion to determine the types

of institutions that may fall within its regulatory reach.71 How the Bureau interprets and applies

these standards could significantly affect the scope of the Bureau’s powers, the regulatory burden

of covered entities, and the impact that the Bureau’s actions have on consumer financial markets.

Depositories With More Than $10 Billion in Assets

With respect to depository institutions holding more than $10 billion in assets (larger

depositories), the CFP Act transfers from the banking regulators to the Bureau the primary

consumer compliance supervisory, enforcement, and rulemaking authorities.72 The safety and

soundness supervisory, enforcement, and rulemaking authorities over these institutions remain

with their banking regulators (i.e., the OCC, FRB, FDIC, or NCUA).

The Bureau’s supervisory powers include the authority to examine larger depositories for

consumer compliance, meaning that the CFPB has “visitorial”73 powers over larger depositories

that historically have been almost exclusively held by their prudential banking regulators. The

Dodd-Frank Act §1002(15), 12 U.S.C. §5481(15).

Dodd-Frank Act §1002(26), 12 U.S.C. §5481(26).

E.g., depository institutions holding more than $10 billion in assets. Dodd-Frank Act §1025, 12 U.S.C. §5515.

E.g., nondepository financial institutions that are “larger participant[s] in a market.” Dodd-Frank Act §1024, 12

U.S.C. §5514.

Dodd-Frank Act §§1061-1067, 12 U.S.C. §§5581-5587.

12 C.F.R. Section 7.4000 defines visitorial powers to include:

(i) Examination of a bank;

(ii) Inspection of a bank’s books and records;

(iii) Regulation and supervision of activities authorized or permitted pursuant to federal banking

law; and

(iv) Enforcing compliance with any applicable Federal or state laws concerning those activities,

including through investigations that seek to ascertain compliance through production of nonpublic information by the bank [subject to certain exceptions]....

See, also, Guthrie v. Harkness, 199 U.S. 148, 158 (1905) (“Visitation, in law, is the act of a superior or superintending

officer, who visits a corporation to examine into its manner of conducting business, and enforce an observance of its

laws and regulations. [Alexander M.] Burrill defines the word to mean ‘inspection; superintendence; direction;

regulation.’” (Burrill authored legal dictionaries often used at the time of the case.)).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

CFP Act, however, does require the Bureau to coordinate examinations and other supervisory

activities with larger depositories’ state and federal prudential regulators, and it establishes a

procedure for resolving conflicts between the Bureau and a prudential regulator.74 The Bureau

may require reports directly from larger depositories, although it must rely on existing reports “to

the fullest extent possible.”75

As a supervisor, the Bureau has an important responsibility of safeguarding non-public

information of financial institutions.76 Through the exercise of its examination and reporting

powers, the CFPB (much like banking regulators) may acquire sensitive competitive, commercial,

and personal information, as well as evidence of practices that may violate state or federal law.

This information could be useful to private litigants, state attorneys general, and market

competitors. However, the banking regulators have long protected much of this information from

being shared with third parties in order to encourage bank officials to willingly provide

information without the fear of private lawsuits and to maintain a competitive marketplace.77 This

information also generally is exempt from public disclosure under the Freedom of Information

Act.78 As a result, parties without examination and other supervisory powers generally have only

been able to gain access to proprietary and confidential bank information through litigation.79

Rules of procedure and evidence associated with litigation serve as significant barriers to access

of banks’ non-public information, and stand in stark contrast to the supervisory powers of the

banking regulators and now the CFPB.

The CFPB has issued regulations governing how it handles confidential information acquired

through its regulatory actions and the extent to which that information may be shared with

individuals and state and federal regulators outside of the CFPB.80 These rules are very similar,

though not identical, to analogous rules prescribed by the banking regulators.81 Despite their

similarity to existing confidentiality rules of the banking regulators, some have expressed concern

that the CFPB will be more willing to share non-public bank information, especially with state

attorneys general to aid investigations and enforcement actions.82 One potential source of this

concern is that, since the CFPB’s primary focus is consumer protection, it may not have reason to

consider the potential impact that an enforcement action may have on an institution’s safety and

soundness.83 Another potential source of this anxiety is that the Bureau has actively pursued

Dodd-Frank Act §1025, 12 U.S.C. §5515.

Dodd-Frank Act §§1022(c)(6) – (9), 12 U.S.C. §§5512(c)(6) – (9).

See, e.g., 12 C.F.R. §4.36 (“It is the OCC’s policy regarding non-public OCC information that such information is

confidential and privileged. Accordingly, the OCC will not normally disclose this information to third parties.”).

5 U.S.C. §552(b)(8) (exempting from public disclosure, information “contained in or related to examination,

operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or

supervision of financial institutions....”).

See, generally, CRS Report R40595, Cuomo v. The Clearing House Association, L.L.C.: National Banks Are Subject

to State Lawsuits to Enforce Non-Preempted State Laws, by (name redacted).

12 C.F.R. pt. 1070.

E.g., compare id. with the OCC’s regulations on the release of non-public information, 12 C.F.R. §§4.31-4.40.

See, e.g., Melanie Hibbs Brody, Paul F. Hancock, David G. McDonough, Jr., and Stephanie C. Robinson, And the

Plot Thickens: the CFPB Issues A Quartet of Interim Final Rules Laying Out Its Investigatory and Enforcement

Procedures, Aug. 16, 2011, available at http://www.klgates.com/and-the-plot-thickens-08-16-2011/.

See, generally, Thomas P. Vartanian, All You Need to Know About CFPB Exam Is in the Manual, American Banker,

Feb. 13, 2012, available at http://www.americanbanker.com/bankthink/all-you-need-to-know-about-CFPB-exam-is-inthe-manual-1046629-1.html?zkPrintable=true. Sharing non-public information in some instances may create litigation

(continued...)

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

partnerships with state attorneys general as a means to enhance consumer protection.84 For

example, the CFPB and the Presidential Initiative Working Group of the National Association of

Attorneys General announced a Joint Statement of Principles, in which they agreed to, among

other things:

•

Share information, data, and analysis about conduct and practices in the markets

for consumer financial products or services to inform enforcement policies and

priorities;

•

Engage in regular consultation to identify mutual enforcement priorities that will

ensure effective and consistent enforcement of the laws that protect consumers of

financial products or services;

•

Support each other, to the fullest extent permitted by law as warranted by the

circumstances, in the enforcement of the laws that protect consumers of financial

products or services, including by joint or coordinated investigations of

wrongdoing and coordinated enforcement actions; [and]

•

Pursue legal remedies to foster transparency, competition, and fairness in the

markets for consumer financial products or services across state lines and without

regard to corporate forms or charter choice for those providers who compete

directly with one another in the same markets;....85

Time will tell whether the Bureau will handle confidential information in much the same way as

banking regulators have in the past or whether it will share information with state prosecutors or

other third parties more freely.

Depositories With $10 Billion or Less in Assets

Although depositories with $10 billion or less in assets (smaller depositories) are subject to the

rules issued by the Bureau to implement the enumerated consumer laws, the primary consumer

protection supervisory and enforcement powers over smaller depository institutions remain with

the prudential banking regulators.

(...continued)

risk or cause reputational harm that may negatively impact an institution’s safety and soundness.

Melanie Hibbs Brody, Paul F. Hancock, David G. McDonough, Jr., and Stephanie C. Robinson, And the Plot

Thickens: the CFPB Issues A Quartet of Interim Final Rules Laying Out Its Investigatory and Enforcement Procedures,

Aug. 16, 2011, available at http://www.klgates.com/and-the-plot-thickens-08-16-2011/. Information sharing

agreements are not unique to the CFPB. The banking regulators also have information sharing agreements with other

state and federal regulators. See, e.g., OCC, CSBS [Conference of State Bank Supervisors] Agree on Consumer

Complaint Information-Sharing Plan, Joint Release NR 2006-126, Nov. 20, 2006, available at http://www.occ.gov/

news-issuances/news-releases/2006/nr-ia-2006-126.html; Memorandum of Understanding Between the FRB, FDIC,

NCUA, U.S. Dept. of Treasury, Fin. Crimes Enforcement Network, OCC, OTS, Governing Information Sharing

pursuant to the Bank Secrecy Act, Sept. 22, 2004, available at http://www.treasury.gov/press-center/press-releases/

Documents/fincenbankingregulatorsmou.pdf.

Consumer Financial Protection Bureau and National Association of Attorneys General Presidential Initiative

Working Group Release Joint Statement of Principles, CFPB Press Release, Apr. 11, 2011, available at

http://www.consumerfinance.gov/pressrelease/consumer-financial-protection-bureau-and-national-association-ofattorneys-general-presidential-initiative-working-group-release-joint-statement-of-principles/.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

However, the Bureau does have some limited supervisory authority over smaller depository

institutions. For instance, the Bureau, “on a sampling basis,” may participate in examinations of

smaller depository institutions that are conducted by prudential regulators.86 The prudential

regulators must provide the CFPB access to all reports, records, and other documents connected

to the examination; must allow the CFPB examiners to participate in all aspects of the

examination; and generally must take into account any input that the CFPB’s examiner offers

regarding the examination. Also, the Bureau may require reports directly from these depositories,

although the Bureau will have to rely on existing reports “to the fullest extent possible.”87

The CFP Act does not provide the Bureau enforcement powers over smaller depository

institutions, although the act does establish a formal procedure by which the Bureau can refer

potential enforcement actions against smaller depository institutions to their prudential regulators.

The relevant banking regulator must respond to such a referral, but would not be bound to take

any other substantive steps associated with it.88

Nondepository Financial Institutions

With respect to nondepository financial institutions, the CFPB may regulate providers of three

categories of specific consumer financial products and services: providers of private student

loans; providers of payday loans;89 and entities that engage in mortgage-related activities, such as

mortgage origination, brokerage, mortgage servicing, mortgage modification, and foreclosure

relief activities.90

In addition to the three particular categories, the Bureau may regulate nondepository financial

institutions it considers to be a “larger participant in a [consumer financial] market,”91 as well as

any entity that the Bureau has reasonable cause to believe is “engaging, or has engaged, in

conduct that poses risks to consumers with regard to the offering or provision of consumer

financial products or services.”92 This discretion may provide the Bureau the latitude to evolve

with the markets by, for example, making it possible to regulate entities that offer consumer

financial products or services that were not in the marketplace when the Dodd-Frank Act was

signed into law.93 On the other hand, this discretion could create uncertainty for those

Dodd-Frank Act §1026(c), 12 U.S.C. §5516(c).

Dodd-Frank Act §1026(b), 12 U.S.C. §5516(b).

Dodd-Frank Act §1026(d), 12 U.S.C. §5516(d).

While the Bureau has authority to regulate payday lenders, it does not have authority to set usury limits. Dodd-Frank

Act §1027(o), 12 U.S.C. §5517(o). Some consumer advocates have argued that interest rate caps are the only proven

way to effectively curb predatory practices of payday lenders. Center for Responsible Lending, Issue Brief: Payday

Loans Put Families in the Red, Feb. 2009, available at http://www.responsiblelending.org/payday-lending/researchanalysis/payday-puts-families-in-the-red-final.pdf (“Payday lending industry representatives have lobbied for other

reforms, such as payment plans and renewal bans, because they understand that these measures have done nothing to

slow the rate at which they can flip loans to the same borrowers. But an interest rate cap is the only measure that has

proven effective.”).

Dodd-Frank Act §1024, 12 U.S.C. §5514.

As determined by the Bureau in regulations after consultation with the FTC. Dodd-Frank Act §1024, 12 U.S.C.

§5514.

Dodd-Frank Act §1024, 12 U.S.C. §5514.

The Bureau appears to interpret its authority to designate larger participants expansively. For instance, in the

preamble to its final regulation Defining Larger Participants of the Consumer Reporting Market, the CFPB stated:

The Bureau has wide discretion in choosing markets in which to define larger participants. The

(continued...)

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

nondepository financial institutions that do not clearly fall within one of these categories.

Concerns associated with this uncertainty might be alleviated if, for example, the CFPB

establishes a policy of providing sufficient notice of its intent to exercise authority over a

particular institution.94 To date, the Bureau has designated certain credit reporting agencies,95 debt

collectors,96 and student loan servicers97 as “larger participants” that are subject to the Bureau’s

supervisory authority and has yet to make a designation pursuant to its “poses risks to consumers”

authority.

The Bureau has the authority to require any company that falls into one of these categories

(covered nondepository) to register with the Bureau, to submit to examinations, to submit to

background checks, and to adhere to other measures designed “to ensure that such persons are

legitimate entities and are able to perform their obligations to consumers.”98 However, the Bureau

generally must coordinate examinations with any other state and federal regulators that have

supervisory authority over covered nondepositories and must rely on existing reports required by

those regulators “to the fullest extent possible.” The Bureau generally serves as the primary

enforcer of federal consumer financial laws with respect to covered nondepositories and has

primary consumer protection rulemaking authority over them.

The Bureau’s examination, reporting, and other supervisory powers over covered nondepository

financial institutions are a significant change from past federal regulation, which largely took the

form of ex post enforcement. The CFPB now has the potential to regulate covered

nondepositories in an analogous fashion to banks, thrifts, and credit unions. While this may

eliminate the competitive forces between depositories, nondepositories, and their regulators that

some believe led to the “regulatory arbitrage” and “race-to-the-bottom” problems discussed

above, it also could increase the regulatory costs of these institutions considerably. These costs

might be passed on to consumers and could push companies out of covered consumer markets

entirely.

(...continued)

Bureau need not conclude before issuing a rule defining larger participants of a given market that

the market identified in the rule has a higher rate of non-compliance, poses a greater risk to

consumers, or is in some other sense more important to supervise than other markets.

Defining Larger Participants of the Consumer Reporting Market, 77 Fed. Reg. 42,874, 42,883 (July 20, 2012).

Further, in the preamble of a rule proposal to define larger participants in the debt collection market, the Bureau stated:

The Bureau has broad discretion in choosing criteria for determining whether a nonbank covered

person is a larger participant of a covered market. For any specific market there could be several

criteria, used alone or in combination, that could be viewed as reasonable alternatives.

Defining Larger Participants in Certain Consumer Financial Product and Service Markets, 76 Fed. Reg. 9,592, 9,598

(proposed Feb. 17, 2012).

For example, when defining certain student loan servicers as “larger participants,” the CFPB issued a notice of

proposed rulemaking on March 28, 2013, with a comment period open for one month. The proposed rule was followed

by a final rule that was published on December 6, 2013. The final rule will go into effect nearly three months later, on

March 1, 2014.

12 C.F.R. §1090.104.

12 C.F.R. §1090.105.

12 C.F.R. §1090.106.

Dodd-Frank Act §1024, 12 U.S.C. §5514.

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Nondepository Institutions with Explicit Exemptions

The Dodd-Frank Act explicitly exempts a number of entities from the CFPB’s jurisdictional

reach, such as automobile dealers and accountants. However, the statutory language defining the

scope of several of these exemptions is complex and includes subjective standards, such as

“regularly extends” and “engaged significantly,” that the Bureau has the discretion to expound on

in guidance and regulations.99

Merchants, Retailers, and Sellers of Nonfinancial Goods and Services

The Bureau generally does not have authority to regulate merchants, retailers, and sellers of nonfinancial goods and services, even if such an entity extends credit to borrowers for the purchase

of their goods and services.100 However, certain business practices of these entities could trigger

CFPB regulatory authority.

The CFPB could regulate a merchant, retailer, and seller of nonfinancial goods or services if such

an entity “regularly extends credit and the credit is subject to a finance charge” and is “engaged

significantly in offering or providing consumer financial products or services.”101 Such an entity

also could become subject to the CFPB’s regulatory authority if it either (1) “assigns, sells or

otherwise conveys to another person such [nondelinquent] debt owed by a consumer,” or (2)

extends credit that “significantly exceeds the market value of the nonfinancial good or service

provided” or otherwise evades the CFP Act.102 However, the Bureau’s rulemaking, supervisory,

and enforcement authorities are further constrained over certain small businesses, as established

by the Small Business Act,103 that otherwise would only fall under the Bureau’s jurisdiction

because they “regularly extend[] credit and the credit is subject to a finance charge.”104 The

Bureau also has authority over merchants, retailers, and sellers of nonfinancial goods or services

to the extent that they fall within the ambit of an enumerated consumer law.105

To illustrate, a large furniture store with a national presence that occasionally allows customers to

pay off the purchase of a bedroom set over the course of 12 months without additional charge

likely would not fall within the Bureau’s jurisdictional reach. If that same furniture store charges

interest over the 12 months, it is possible that the store could be regulated by the CFPB. However,

a small, independently owned furniture store that regularly charges interest on furniture purchases

that are paid off over 12 months may fall outside the Bureau’s regulatory authority due to the CFP

The CFP Act also explicitly prohibits the Bureau from imposing interest rate caps (a.k.a., usury limits) on any loan or

other extension of credit. Dodd-Frank Act §1027(o), 12 U.S.C. §5517(o).

100

Dodd-Frank Act §1027(a), 12 U.S.C. §5517(a) (“Except as provided in subparagraph (B), and subject to

subparagraph (C), the Bureau may not exercise any rulemaking, supervisory, enforcement, or other authority under this

title with respect to a merchant, retailer, or seller of nonfinancial goods or services, but only to the extent that such

person—(i) extends credit directly to a consumer ... exclusively for the purpose of enabling that consumer to purchase

such nonfinancial good or service directly from the merchant, retailer, or seller; (ii) ... collects debt arising from [such]

credit ... or (iii) sells or conveys [such] debt ... that is delinquent or otherwise in default.”).

101

Dodd-Frank Act §1027(a)(2), 12 U.S.C. §5517(a)(2).

102

Dodd-Frank Act §1027(a)(2), 12 U.S.C. §5517(a)(2).

103

15 U.S.C. §632.

104

Dodd-Frank Act §1027(a)(2)(D), 12 U.S.C. §5517(a)(2)(D). To qualify as a small business for the purposes of this

provision, a merchant, retailer, or seller must meet the size thresholds that are provided by 15 U.S.C. §632.

105

Dodd-Frank Act §1027(a)(1), 12 U.S.C. §5517(a)(1).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Act’s exception for certain small businesses. All furniture stores, regardless of their size, that

extend consumer loans generally must comply with TILA and the regulations implemented under

that act by the Bureau.

In short, the Bureau’s authority to supervise, prescribe regulations, and enforce consumer

protection laws with regard to merchants, retailers, and sellers of nonfinancial goods is limited,

but not insubstantial. The extent to which the Bureau may regulate these institutions is based on

subjective standards such as “regularly extends credit,” “engaged significantly,” and

“significantly exceeds.” Unless the Bureau provides guidance on how this language will be

interpreted, merchants, retailers, and sellers may have difficulty determining whether or not they

will be regulated by the CFPB and the extent to which they would have to modify their business

practices and procedures to avoid regulation.

Automobile Dealers

The Bureau generally does not have supervisory, rulemaking, or enforcement powers over

automobile dealers engaged in leasing, selling, or servicing automobiles. However, the Bureau

may regulate financial activities engaged in by automobile dealers that are outside of the normal

automobile dealer business.106 For example, the Bureau could regulate an automobile dealer to the

extent that it extends credit directly to consumers rather than “routinely assign[ing the credit] to

an unaffiliated third party finance or leasing source.”107 The CFPB also would have jurisdiction

over automobile dealers that sell or offer to sell consumer financial products or services unrelated

“to the sale, financing, leasing, rental, repair, refurbishment, maintenance, or other servicing of

motor vehicles, motor vehicle parts, or any related or ancillary product or services.”108 This could

include dealers that offer car title loans, payday loans, or mortgage-related products or services.

Although the Bureau’s regulatory powers over automobile dealers are significantly constrained,

the CFP Act streamlines the rulemaking process that the FTC must follow to issue unfair or

deceptive trade practice rules against automobile dealers. Normally, when the FTC promulgates

unfair or deceptive rules pursuant to Section 5 of the Federal Trade Commission Act (FTC

Act),109 it must adhere to the rigorous procedures of the Magnuson-Moss Act,110 which include

public hearings and publishing staff reports.111 The CFP Act authorizes the FTC to issue these

rules in accordance with the standard informal rulemaking procedures of the Administrative

106

The CFPB also has authority to regulate certain financial institutions that may offer consumer financial services

through automobile dealers, such as indirect automobile lenders. See CFPB Bulletin 2013-02, Indirect Auto Lending

and Compliance with the Equal Credit Opportunity Act, Mar. 21, 2013, available at http://files.consumerfinance.gov/f/

201303_cfpb_march_-Auto-Finance-Bulletin.pdf.

107

Dodd-Frank Act §1029, 12 U.S.C. §5519.

108

Dodd-Frank Act §1029, 12 U.S.C. §5519.

109

15 U.S.C. §45.

110

15 U.S.C. §57a.

111

See, Federal Trade Commission Operating Manual ch. 7.3, available at http://www.ftc.gov/about-ftc/foia/foiaresources/ftc-administrative-staff-manuals. Other steps include “an investigation oriented towards rulemaking,” a staff

report that “provide[s] sufficient reason for the Commission to conclude that corrective actions is warranted and that

rulemaking is the enforcement method of choice,” an advance notice of proposed rulemaking (ANPR) published in the

Federal Register, making the information collected as part of the investigation available for public review, and

publishing a final staff report. See, also, CRS Report R41546, A Brief Overview of Rulemaking and Judicial Review, by

(name redacted) and (name redacted).

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Procedure Act.112 Thus, while automobile dealers generally are outside of the Bureau’s authority,

the CFP Act may make it somewhat easier for the FTC to regulate them.

Other Excluded Entities

Real estate brokers,113 real estate agents,114 sellers of manufactured and mobile homes,115 income

tax preparers,116 and accountants117 generally are not subject to the Bureau’s rulemaking,

supervisory, and enforcement authorities to the extent that they are acting in their normal

capacities. However, the Bureau may regulate these entities if they extend credit; otherwise sell or

offer to sell a consumer financial product or service; or engage in an activity that makes them

subject to an enumerated consumer law.118

When practicing law, attorneys generally are exempt from the Bureau’s supervisory and

enforcement authority (although the act does not explicitly exempt attorneys from the Bureau’s

rulemaking authority). However, this exemption does not apply to the extent that an attorney sells

or offers to sell “a consumer financial product or service ... that is not offered or provided as part

of, or incidental to, the practice of law, occurring exclusively within the scope of the attorneyclient relationship; or that is otherwise offered or provided by the attorney in question with

respect to any consumer who is not receiving legal advice or services from the attorney in

connection with such financial product or service.”119 Thus, the Bureau likely would not have

authority to regulate an attorney who advances credit based on an expected legal award to a client

to cover necessary living expenses during the course of the litigation.120 However, the CFP Act’s

exemption for attorneys likely would not apply to a lawyer who regularly extends similar loans to

non-clients.

Other entities and activities that generally fall outside of the Bureau’s jurisdiction include

insurance companies;121 employee benefit plans;122 entities that are regulated by state securities

commissions;123 firms regulated by the Securities and Exchange Commission (SEC)124 or the

Commodity Futures Trading Commission (CFTC);125 entities regulated by the Farm Credit

Administration;126 and donations to tax-exempt charities.127

112

5 U.S.C. §553. See, also, CRS Report R41546, A Brief Overview of Rulemaking and Judicial Review, by (name

redacted) and (name redacted).

113

Dodd-Frank Act §1027(b), 12 U.S.C. §5517(b).

114

Dodd-Frank Act §1027(b), 12 U.S.C. §5517(b).

115

Dodd-Frank Act §1027(c), 12 U.S.C. §5517(c).

116

Dodd-Frank Act §1027(d), 12 U.S.C. §5517(d).

117

Dodd-Frank Act §1027(d), 12 U.S.C. §5517(d).

118

Dodd-Frank Act §1027, 12 U.S.C. §5517.

119

Dodd-Frank Act §1027(e), 12 U.S.C. §5517(e).

120

Although these activities may fall outside the scope of the Bureau’s jurisdiction, they may be governed by attorney

rules of professional conduct.

121

Dodd-Frank Act §1027(f), 12 U.S.C. §5517(f).

122

Dodd-Frank Act §1027(g), 12 U.S.C. §5517(g).

123

Dodd-Frank Act §1027(h), 12 U.S.C. §5517(h).

124

Dodd-Frank Act §1027(i), 12 U.S.C. §5517(i).

125

Dodd-Frank Act §1027(j), 12 U.S.C. §5517(j).

126

Dodd-Frank Act §1027(k), 12 U.S.C. §5517(k).

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Newly Established Rulemaking

The Dodd-Frank Act establishes procedures that the Bureau must follow when proposing and

prescribing rules, in addition to the notice of proposed rulemaking and comment period

procedures required for informal rulemakings under the Administrative Procedure Act and other

generally applicable federal administrative laws.128 The act also imposes additional procedures for

specific types of rulemaking (e.g., when declaring certain acts or practices to be unfair or

abusive), which are discussed below.129

General Rulemaking Powers

The CFP Act authorizes the Bureau to “prescribe rules and issue orders and guidance, as may be

necessary or appropriate to enable the Bureau to administer and carry out the purposes and

objectives of the Federal consumer financial laws, and to prevent evasions thereof.”130 Before

proposing a rule and during the comment period of a proposed rule, the CFPB is required to

consult with the “appropriate” financial regulators.131 The Bureau must address any written

objections by the federal prudential regulators when issuing final regulations. Additionally, the

CFPB must consider “the potential benefits and costs to consumers and covered persons,

including the potential reduction of access by consumers to consumer financial products and

services resulting from such rule,” as well as the impact the rule would have on smaller

depositories and “consumers in rural areas.”132

The CFP Act also requires the Bureau to take a number of steps to evaluate the impact that

proposed regulations may have on small businesses. If the Bureau expects that a proposed rule

will have a “significant economic impact on a substantial number of small entities,”133 then it

must offer a written analysis that describes, among other things:

(A) any projected increase in the cost of credit for small entities; (B) any significant

alternatives to the proposed rule which accomplish the stated objectives of applicable statutes

and which minimize any increase in the cost of credit for small entities; and (C) advice and

recommendations of representatives of small entities relating to issues described in

subparagraphs (A) and (B)....134

(...continued)

127

Dodd-Frank Act §1027(l), 12 U.S.C. §5517(l).

128

5 U.S.C. §553.

129

For a more detailed comparison of general administrative rulemaking procedures and those that specifically apply to

the Bureau, see CRS Report R41380, The Dodd-Frank Wall Street Reform and Consumer Protection Act: Regulations

to be Issued by the Consumer Financial Protection Bureau, by (name redacted). The author of this report has since

left CRS, but questions about its content may be directed to (name redacted), 7-...., [redacted]@crs.loc.gov.

130

Dodd-Frank Act §1022(b), 12 U.S.C. §5512(b).

131

Dodd-Frank Act §1022(b), 12 U.S.C. §5512(b).

132

Dodd-Frank Act §1022(b), 12 U.S.C. §5512(b).

133

“Small entities” include small businesses, small organizations, and small governmental jurisdictions, as those terms

are defined at 5 U.S.C. §601.

134

5 U.S.C. §603(d), as amended by Dodd-Frank Act §1100G. These requirements would not have to be met if the

CFPB issued final regulations without issuing a notice of proposed rulemaking as allowed under certain circumstances

pursuant to the Administrative Procedure Act.

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

The Bureau, at times, also must convene a small business “advocacy review panel” pursuant to

the Regulatory Flexibility Act before proposing regulations that likely will have a “significant

economic impact on a substantial number of small entities.”135 These panels, which are comprised

of representatives of the types of small businesses that likely would be affected by the

regulations, issue reports describing the potential impact of the proposed rule on small businesses

and providing advice and recommendations on, among other things, how to simplify the rule or

reduce its compliance costs while still meeting the proposal’s objectives.136

The Bureau also must solicit public feedback and publish a report assessing the effectiveness of

any “significant rule or order” it has issued within five years of the rule becoming effective.137

The act does not specify what is to be considered “significant,” presumably leaving these

determinations to the Bureau.

The CFP Act also transfers to the CFPB rulemaking authority under the enumerated consumer

laws.138 In some instances, the Bureau will share rulemaking powers under the enumerated

consumer laws with other financial regulators. For example, the CFPB has primary rulemaking

authority under the Electronic Funds Transfer Act, but the FRB has exclusive authority to

prescribe regulations to implement the debit interchange fee restrictions of Section 920 of that

act, which is commonly referred to as the “Durbin Amendment.”139

As a check on the Bureau’s rulemaking powers, the Financial Stability Oversight Council

(FSOC)—which is established under Title I of the Dodd-Frank Act and mainly composed of the

federal financial regulators, including the Director of the Bureau140—has the ability to set aside or

stay a regulation prescribed by the Bureau if the regulation “would put the safety and soundness

of the United States banking system or the stability of the financial system of the United States at

risk.”141 No other federal financial regulator is subject to a similar executive agency “veto”

power, so there are no real analogs to look to for guidance on how frequently this power could be

used. Because the FSOC is comprised of the heads of financial regulators with whom the CFPB

generally must consult when crafting regulations, the Bureau likely will be aware of concerns of

FSOC members about a proposed rule and likely will have the opportunity to allay those concerns

before a rule is finalized, which may reduce the probability of the FSOC exercising this authority.

135

5 U.S.C. §609(d), as amended by Dodd-Frank Act §1100G. For a more detailed description of the Bureau’s

obligations under the Regulatory Flexibility Act, see CRS Report R41380, The Dodd-Frank Wall Street Reform and

Consumer Protection Act: Regulations to be Issued by the Consumer Financial Protection Bureau, by (name reda

cted) and Fact

Sheet: Small Business Review Panel Process, Consumer Fin. Prot. Bureau, available at

http://files.consumerfinance.gov/f/201205_CFPB_public_factsheet-small-business-review-panel-process.pdf.

136

5 U.S.C. §609(d).

137

Dodd-Frank Act §1022(d), 12 U.S.C. §5512(d).

138

Dodd-Frank Act Title X, Subtitle H, 12 U.S.C. §§5581, et seq.

139

15 U.S.C. §1693b, as amended by Dodd-Frank Act §1084(3).

140

The Director also will serve as an ex-officio member of the FDIC board. 12 U.S.C. §1812(f)(2), as amended by

Dodd-Frank Act §336.

141

Dodd-Frank Act §1023(a), 12 U.S.C. §5513(a).

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Specific Rulemaking Powers

Unfair, Deceptive, or Abusive Acts or Practices

The Bureau has authority to prescribe rules declaring certain acts or practices pertaining to be

unlawful because they are unfair, deceptive, or abusive. This is a broad mandate that leaves the

Bureau with a great deal of discretion to determine how to wield this power, in part, because of

the inherent difficulty of objectively defining the terms “unfair,” “deceptive,” and “abusive.”

However, the Bureau’s unfair, deceptive, and abusive rulemaking authority is very similar to the

FTC’s mandate under the FTC Act.142 For example, the statutory language defining “unfairness”

under the CFP Act is virtually identical to the FTC Act’s standard of unfairness.143 Thus, while it

is not statutorily required to do so, the Bureau might look to the FTC’s long-standing

interpretation of the FTC Act when prescribing regulations under this new authority, to the extent

that doing so also comports with the CFP Act.144

Although these two mandates are similar in many ways, there are some important distinctions

between them. One is their scope. The Bureau’s unfair, deceptive, and abusive authority is limited

to consumer financial products and services and to those entities that fall under the Bureau’s

general regulatory jurisdiction. The FTC’s authority applies to a broader universe of “acts or

practices in or affecting commerce,” as that phrase is defined in 15 U.S.C. Section 45.

A second important distinction is the procedural requirements that must be met before rules can

be prescribed. When prescribing rules under Section 1023 of the Dodd-Frank Act, the Bureau

must consult with the other federal financial regulators, as appropriate, and otherwise follow the

general rulemaking procedures, as described above. The FTC, on the other hand, generally must

follow the much more onerous, time consuming, and costly procedures of 15 U.S.C. Section 57a,

commonly referred to as “Magnuson-Moss rulemaking” after the law that established them.145

142

15 U.S.C. §§41, et seq.

Compare Dodd-Frank Act §1031, 12 U.S.C. §5531(the Bureau may not declare an act or practice unfair unless it has

“a reasonable basis to conclude that the act or practice causes or is likely to cause substantial injury to consumers,

which is not reasonably avoidable by consumers; and such substantial injury is not outweighed by countervailing

benefits to consumers or competition.”) with 15 U.S.C. §45(n) (“The [Federal Trade] Commission shall have no

authority under this section or section 57a of this title to declare unlawful an act or practice on the grounds that such act

or practice is unfair unless the act or practice causes or is likely to cause substantial injury to consumers which is not

reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to

competition.”).

144

See, e.g., CFPB Bulletin 2013-07, Prohibition of Unfair, Deceptive, or Abusive Acts or Practices in the Collection

of Consumer Debts, at 1, n.1, July 10, 2013, available at http://files.consumerfinance.gov/f/

201307_cfpb_bulletin_unfair-deceptive-abusive-practices.pdf (“The principles of ‘unfair’ and ‘deceptive’ practices in

the [CFP] Act are informed by the standards for the same terms under Section 5 of the Federal Trade Commission Act.

... To the extent that this Bulletin cites FTC guidance or authority, such references reflect the views of the FTC, and are

not binding upon the bureau in interpreting the Dodd-Frank Act’s prohibition on UDAAPs.”). See also FTC Policy

Statement on Unfairness, Dec. 17, 1980, available at http://www.ftc.gov/ftc-policy-statement-on-unfairness, and FTC

Policy Statement on Deception, Oct. 14, 1983, available at http://www.ftc.gov/ftc-policy-statement-on-deception.

145

Magnuson-Moss Warranty—Federal Trade Commission Improvement Act, P.L. 93-637, 15 U.S.C. §57a. See,

Federal Trade Commission Operating Manual ch. 7.3, available at http://www.ftc.gov/about-ftc/foia/foia-resources/ftcadministrative-staff-manuals. Required steps include “an investigation oriented towards rulemaking”; a staff report that

“provide[s] sufficient reason for the Commission to conclude that corrective actions is warranted and that rulemaking is

the enforcement method of choice”; an advance notice of proposed rulemaking (ANPR) published in the Federal

final staff report. See, also, CRS Report R41546, A Brief Overview of Rulemaking and Judicial Review, by Todd

(continued...)

143

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The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Another distinction is the statutory use of the term “abusive.” The FTC Act does not explicitly bar

“abusive” acts or practices. As a result, the FTC has not provided long-standing guidance and

commentary on the term’s meaning from which the Bureau could draw.146 The CFP Act does

provide the Bureau statutory guidance on the term’s meaning, although this statutory language is

somewhat malleable. Under the CFP Act, an abusive act or practice may only be deemed

unlawful by regulation if it:

materially interferes with the ability of a consumer to understand a term or condition of a

consumer financial product or service; or takes unreasonable advantage of (a) a lack of

understanding on the part of the consumer ...; (b) the inability of the consumer to protect the

interests of the consumer in selecting or using a consumer financial product or service; or (c)

the reasonable reliance by the consumer on a covered person to act in the interests of the

consumer.147

While the terms “materially interferes,” “unreasonable advantage,” and “reasonable reliance”

could provide the Bureau the flexibility to regulate emerging business practices for the benefit of

consumers, at the same time, the regulated community may have to cope with the inherent

uncertainty that results from this flexibility.

Disclosure Requirements

The Bureau has the authority to prescribe rules imposing disclosure requirements to help

consumers understand the terms, benefits, costs, and risks of financial products and services.

When prescribing these rules, the CFPB must follow the general rulemaking procedures

described above and also must “consider the available evidence about consumer awareness,

understanding of, and responses to disclosures or communications about the risks, costs, and

benefits of consumer financial products or services.”148

(...continued)

Garvey and (name redacted). As is discussed above, the FTC does not have to comply with the Magnuson-Moss

rulemaking procedures to issue unfair or deceptive trade practice regulations against automobile dealers. Dodd-Frank

Act §1029, 12 U.S.C. §5519. Although previous iterations of what would ultimately become the CFP Act modified the

FTC’s rulemaking procedures for declaring unfair or deceptive trade practices under Section 5 of the FTC Act, those

changes were not included in the Dodd-Frank Act, as enacted.

146

Other federal consumer protection laws under which the FTC historically has held rulemaking and enforcement

authority do prohibit “abusive” practices. For example, Section 806 of the Fair Debt Collection Practices Act (15

U.S.C. §§1692, et seq.) prohibits debt collectors from engaging in conduct, “the natural consequence of which is to

harass, oppress, or abuse any person in connection with the collection of a debt.” 15 U.S.C. §1692d (emphasis added).

The Telemarketing and Consumer Fraud and Abuse Prevention Act (15 U.S.C. §§6101 et seq.) also provides the FTC

the authority to “prescribe rules prohibiting deceptive telemarketing acts or practices and other abusive telemarketing

acts or practices.” 15 U.S.C. 6102(a) (emphasis added). As a result, the FTC does have experience interpreting the

terms “abuse” and “abusive” in contexts outside of the FTC Act, and this experience might be informative to the CFPB.

See, e.g., FTC Staff Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg. 50,097 (Dec. 13, 1988); 16

C.F.R. §310.4.

147

Dodd-Frank Act §1031, 12 U.S.C. §5531. See also CFPB Bulletin 2013-07, Prohibition of Unfair, Deceptive, or

Abusive Acts or Practices in the Collection of Consumer Debts, at 1, n.1, July 10, 2013, available at

http://files.consumerfinance.gov/f/201307_cfpb_bulletin_unfair-deceptive-abusive-practices.pdf.

148

Dodd-Frank Act §1032, 12 U.S.C. §5532.

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Rulemakings Initiated by the States

If a majority of states adopt a resolution requesting a new consumer protection regulation under

the CFPB’s jurisdiction or a change in an existing rule, the Bureau must issue a notice of

proposed rulemaking on the subject. Before finalizing such a rule, the Bureau must assess

whether or not the final rule will (1) increase consumer protection; (2) create more benefits than

costs for consumers; (3) unfairly discriminate against a group of consumers; and (4) “likely []

present an unacceptable safety and soundness risk to insured depository institutions,” if such a

concern is raised by a prudential regulator. If the Bureau decides not to finalize such a rule, it

must publish an explanation of the decision in the Federal Register.149

Rulemaking Under the Enumerated Consumer Laws

As previously mentioned, the CFPB acquired authority to prescribe regulations pursuant to 19

federal consumer protection laws that largely predate the Dodd-Frank Act. Individually, these

enumerated consumer laws target discrete activities.150 Taken as a whole, they govern a broad and

diverse set of consumer activities and services including debt collection practices, debit card

transfers, overdraft services, consumer leases, mortgage lending, credit card lending, mortgage

appraisals, real estate settlement practices, and credit reporting. As a result, the transfer of

rulemaking authority under these laws represents a major source of the Bureau’s regulatory

powers.

The CFPB has not acquired rulemaking authority over all existing federal consumer financial

protection laws. For example, the FTC retains its primary rulemaking authority under the FTC

Act;151 the banking regulators continue to hold rulemaking authority pursuant to the Community

Reinvestment Act;152 and HUD maintains its rulemaking authority under the Fair Housing Act.153

149

Dodd-Frank Act §1041(c), 12 U.S.C. §5551(c).

The enumerated consumer laws are: the Alternative Mortgage Transaction Parity Act, 12 U.S.C. §§3801, et seq.; the

Consumer Leasing Act of 197615 U.S.C. §§1667, et seq.; the Electronic Funds Transfer Act, 15 U.S.C. §§1693, et seq.,

except with respect to section 920; the Equal Credit Opportunity Act, 15 U.S.C. §§1691, et seq.; the Fair Credit Billing

Act, 15 U.S.C. §§1666, et seq.; the Fair Credit Reporting Act, 15 U.S.C. §§1681, et seq., except with respect to sections

1681m(e) and 1681w; the Homeowners Protection Act of 1998, 12 U.S.C. §§4901, et seq.; the Fair Debt Collection

Practices Act, 15 U.S.C. §§1692, et seq.; subsections (b) through (f) of section 43 of the Federal Deposit Insurance Act,

12 U.S.C. §§ 1831t(c)-(f); sections 502 through 509 of the Gramm-Leach-Bliley Act, 15 U.S.C. §§6802-6809, except

for section 6805 as it applies to section 6801(b); the Home Mortgage Disclosure Act of 1975, 12 U.S.C. §§2801, et

seq.; the Home Ownership and Equity Protection Act of 1994, 15 U.S.C. §1639; the Real Estate Settlement Procedures

Act of 1974, 12 U.S.C. §§2601, et seq.; the S.A.F.E. Mortgage Licensing Act of 2008, 12 U.S.C. §§5101, et seq.; the

Truth in Lending Act (TILA), 15 U.S.C. §§1601, et seq.; the Truth in Savings Act, 12 U.S.C. §§4301, et seq.; section

626 of the Omnibus Appropriations Act, 2009, P.L. 111-8 §626; the Interstate Land Sales Full Disclosure Act, 15

U.S.C. §§1701, et seq.; and many provisions of the Mortgage Reform and Anti-Predatory Lending Act, Dodd-Frank

Act Title XIV, Subtitles A, B, C, and E, and §§1471, 1472, 1475, and 1476.

151

15 U.S.C. §§41, et seq.

152

12 U.S.C. §§2901, et seq.

153

42 U.S.C. §§3601, et seq.

150

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Funding

The Bureau’s funding does not primarily derive from appropriations, like that of most executive

agencies, or assessments on institutions within its regulatory jurisdiction, as is typical of federal

banking regulators. Instead, the Bureau primarily is funded by a transfer of non-appropriated

funds from the Federal Reserve System’s combined earnings, in an amount “determined by the

Director to be reasonably necessary to carry out the authorities of the Bureau,” subject to

specified caps.154 The cap was 10% of the total operating expenses of the FRS for FY2011, 11%

for FY2012, and will be 12% going forward. The caps are based on the operating expenses as

reported in the FRS’s annual report for 2009 and are to be adjusted for inflation.155 The FRS’s

operating expenses for FY2009 totaled $4.98 billion, 12% of which is approximately $598

million.156 The Bureau’s estimated budget is $541 million for FY2013 and is $497 million for

FY2014.157

In addition to the transfer of funds from the FRS, the act authorizes appropriations if the Director

“determine[s] that sums available to the Bureau [as specified by the caps] under this section will

not be sufficient to carry out the authorities of the Bureau under Federal consumer financial law

for the upcoming year.” Upon the Bureau’s making such a finding and submitting a report to both

the House and Senate Committees on Appropriations, the CFP Act provides authorization for an

appropriation of $200 million per year for FY2010-FY2014.158 To date, the CFPB has not

requested appropriated funds nor have any funds been appropriated to the Bureau.

The act also establishes a Consumer Financial Civil Penalty Fund for civil penalties secured by

the Bureau for violations of consumer financial protection laws. The Bureau is authorized to use

the funds to pay victims of such violations, as well as for financial literacy and consumer

education programs.159

The statutory caps on the funds that may be transferred to the CFPB give the Bureau less

flexibility than the OCC, FDIC, and other banking regulators that are able to increase assessments

on the institutions within their jurisdiction to raise revenue, as needed to carry out their

responsibilities.160 On the other hand, because it does not rely on appropriations for funding, the

Bureau enjoys some degree of insulation from the uncertainties inherent to the congressional

appropriations process. Congress does have many other ways of exerting influence over and

conducting oversight of the Bureau’s budget outside of the typical appropriations process. The

154

Dodd-Frank Act §1017, 12 U.S.C. §5497. See, also, Financial Report of the Consumer Financial Protection Bureau

Fiscal Year 2011, at 22, available at http://files.consumerfinance.gov/f/reports/CFPB_Financial_Report_FY_2011.pdf.

For materials on the CFPB’s budget, funding, audits, and related financial information, see

http://www.consumerfinance.gov/budget/.

155

Dodd-Frank Act §1017, 12 U.S.C. §5497.

156

Federal Reserve System’s 96th Annual Report, 2009, available at http://www.federalreserve.gov/boarddocs/

rptcongress/annual09/pdf/ar09.pdf.

157

The CFPB Strategic Plan, Budget, and Performance Plan and Report, at 10, Apr. 2013, available at

http://files.consumerfinance.gov/f/strategic-plan-budget-and-performance-plan-and-report.pdf. Additional information

about the CFPB’s budget and financing is available at http://www.consumerfinance.gov/budget/.

158

Dodd-Frank Act §1017(e), 12 U.S.C. §5497(e).

159

Dodd-Frank Act §1017(b), 12 U.S.C. §5497(b). More information about the Consumer Financial Civil Penalty Fund

is available at http://www.consumerfinance.gov/budget/civil-penalty-fund/.

160

See, e.g., 12 U.S.C. §§482, 1817(b).

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

CFP Act, for example, requires the Bureau to submit semi-annual reports to Congress that

provide, among other things, a justification of its budget requests. A minimum of twice each year,

the Bureau Director must appear before the Senate Committee on Banking, Housing, and Urban

Affairs; the House Committee on Financial Services; and the House Committee on Energy and

Commerce.161 The Bureau also must submit certain financial information for Office of

Management and Budget review and is subject to regular audits by the Comptroller General.162 Of

course, Congress could pass legislation that subjects the Bureau’s budget to additional

congressional scrutiny, including the appropriations process.163

Conclusion

The CFP Act substantially, though not completely, consolidates in the CFPB federal consumer

protection powers that previously were held by seven other regulators. It has the authority to write

rules to implement a broad array of federal consumer financial protection laws, as well as most

consumer compliance supervisory and enforcement powers over larger depositories. However, the

CFPB did not acquire from the banking regulators the primary supervisory and enforcement

powers over smaller depositories.

The Bureau also wields new federal consumer financial protection powers to regulate

nondepository financial institutions, which previously were largely unregulated at the federal

level. However, the CFP Act wholly exempts certain nondepository financial institutions from the

Bureau’s regulatory reach and curtails the CPFB’s authority to regulate others.

Although the powers that the CFPB has at its disposal are largely the same or analogous to those

that other federal regulators have held for decades, there is a great deal of uncertainty in how the

new agency will exercise these broad and flexible authorities, especially in light of its almost

exclusive focus on consumer protection and the novel expansion of federal oversight to

nondepository financial institutions. This uncertainty has some anxious that the Bureau, in the

name of protecting consumers, may excessively restrict consumer credit and unduly increase

regulatory costs.164 As the Bureau continues to exercise its authorities, policy makers will have a

performance record on which to evaluate how the CFP Act is working and whether amendments

might improve consumer protections, increase access to credit markets, reduce the costs of

consumer financial products and services, or reduce compliance costs.

161

Dodd-Frank Act §1016, 12 U.S.C. §5496.

Dodd-Frank Act §1017(a), 12 U.S.C. §5497(a); P.L. 112-10 §1573(c), 12 U.S.C. §5496a.

163

H.R. 3519, the Bureau of Consumer Financial Protection Accountability and Transparency Act of 2013, for

example, would require the CFPB to be funded through appropriations.

164

See, e.g., McConnell, 42 Senators Demand Accountability and Transparency at the Consumer Financial Protection

Bureau, Republican Leader Mitch McConnell, Press Release, Feb. 1, 2013, available at

162

Congressional Research Service

The Consumer Financial Protection Bureau (CFPB): A Legal Analysis

Author Contact Information

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

Congressional Research Service

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