The Bureau of Consumer Financial Protection (“BCFP” or the “Bureau”) wants your input on its proposed changes to the Trial Disclosure Programs Policy (“TDP Policy”). Under Dodd-Frank, the BCFP can permit covered persons to conduct trial disclosure programs and to provide a safe harbor (or waiver) from the corresponding applicable regulatory requirements. 12 U.S.C. § 5532(e). These trials can include modifications or replacements to existing disclosures or forms, changed delivery mechanisms, or the elimination of certain disclosure requirements. The BCFP previously published the TDP Policy in October 2013. However, as the Bureau noted, the prior version of the policy “failed to effectively encourage trial disclosure programs: The Bureau did not permit a single such program in the nearly five years since the Policy was issued.”
The proposed TDP Policy looks quite similar to the 2013 version, with a few differences that reflect the BCFP’s renewed focus on innovation and a desire to lessen the burden of approving trial programs. In particular, the proposal:
- Explicitly encourages trade groups or “other groups” to apply for the program on behalf of their members;
- Requires provision of testing data to the Bureau;
- Suggests that a two-year testing period would be appropriate in most cases;
- Emphasizes the “quality and persuasiveness” of the application in determining whether to approve a trial disclosure program (and removes references to certain criteria contained in the prior TDP Policy, including an evaluation of the strength of the applicant’s compliance management system and the extent to which existing data or other evidence already indicate that the proposed changes will result in the intended improvements);
- Establishes a 60-day review period for applications;
- Removes references to denying trial programs that the Bureau believes will weaken consumer understanding no matter the cost savings obtained;
- Adds a new criteria to the waiver terms and conditions indicating that the Bureau will not make any supervisory findings or bring any action against the applicant under the Bureau’s UDAAP authority during the duration of the waiver;
- Adds a new section to the TDP Policy with procedures to extend waivers based on the quality and persuasiveness of the test result data; and
- Adds a new section to the TDP Policy for regulatory coordination between the Bureau and other federal and state “regulatory sandboxes.”
While it is too soon to know if the revised policy will result in actual waivers being approved, the changes described above, including forgoing any UDAAP findings or actions and the commitment to coordinate with other regulators, could be an important spur to jumpstart the trial disclosure process. In any event, it appears clear that the new leadership at the Bureau is hoping to invigorate its Office of Innovation.
Comments on the proposed revisions are due October 10, 2018 and can be made via web (www.regulations.gov), email (FederalRegisterComments@cfpb.gov) or mail/hand delivery/courier (Comment Intake, Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552).