Effective Agency Guidance: Examining Bank Regulators’ Guidance Practices

Re: Effective Agency Guidance: Examining Bank Regulators’ Guidance Practices

On behalf of the American Bankers Association, I am writing to call your attention to a growing concern of our members: the use of “guidance” to advance regulatory policy agendas. While the banking industry welcomes guidance that helps banks understand and comply with legal requirements, too often recently, your agencies have characterized as guidance what is in practice a “legislative rule” that Congress requires to go through notice-and-comment rulemaking. In the most egregious cases, your agencies have issued guidance that exceeds the legal authority Congress provided.

These guidance documents typically come without warning. And the failure to confer with industry about interpretive questions, operational impacts, and system constraints limits the utility of guidance, undermines its acceptance, and may limit its durability as administrations change.

As a courtesy, I am sharing a copy of our latest white paper, Effective Agency Guidance: Examining Bank Regulators’ Guidance Practices. It examines the legal requirements applicable to guidance, describes instances in which your agencies issued guidance consistent with these legal requirements, and contrasts these examples with a discussion of instances when we believe they did not. In addition, the white paper recommends that your agencies adopt written procedures governing the development, issuance, and use of guidance, which will maximize the utility of future guidance documents. Our intent is for your agencies to issue guidance documents that are transparent, consistent with the law, and focused on promoting the interests of consumers in a strong, vibrant, and innovative market for consumer financial products and services.

In addition, I have also attached copies of five letters that offer industry feedback on recently issued “guidance” that we believe would benefit from public input. These include comments on the FDIC’s supervisory guidance on multiple re-presentment NSF Fees, the CFPB’s advisory opinion on customer information requests, the CFPB’s advisory opinion on the application of RESPA to digital mortgage comparison shopping platforms, the CFPB’s circular on adverse action notification requirements, and the CFPB and Department of Justice’s joint statement on immigration status and Regulation B. We hope your agencies will consider our members’ constructive feedback on each and welcome the opportunity for further discussion.