On March 6, 2020, the Consumer Financial Protection Bureau (CFPB) announced three new initiatives aimed at preventing consumer harm. The CFPB will be: (1) implementing an advisory opinion program; (2) amending and reissuing its responsible business conduct bulletin; and (3) engaging with Congress to advance proposed whistleblower legislation.
Advisory Opinion Program
According to the CFPB, the advisory program will allow parties to submit compliance questions online. After reviewing the questions, the CFPB will publish responding advisory opinions in the Federal Register and on the CFPB website with an interpretation of the CFPB’s existing rules. This process aligns with processes followed by many other agencies and will provide transparency to the CFPB’s interpretive guidance.
The CFPB will issue procedures for how submissions will be prioritized and addressed, which should allow parties seeking advisory opinions to better tailor their requests. The goals of the CFPB appear to be to increase transparency on the CFPB’s part and to provide regulatory certainty to all regulated entities and other stakeholders.
To this end, CFPB Director Kathy Kraninger stated that the “[a]dvisory opinions will ensure that companies know what compliance entails and what constitutes a violation.”
Responsible Business Conduct Bulletin
CFPB originally published a Responsible Business Conduct Bulletin in June 2013. The CFPB’s amended and reissued bulletin aims at strengthening the original bulletin and clarifying the CFPB’s approach to responsible business conduct. In the CFPB’s view, responsible business conduct “can improve the Bureau’s ability to promptly detect violations, increase the effectiveness of its supervisory and enforcement work, enable the Bureau to better focus its finite resources, and help more consumers get redress.”
The bulletin identifies four categories of responsible conduct for entities—(1) self-assessing; (2) self-reporting; (3) remediation; and (4) cooperation—that the CFPB will favorably consider in addressing violations in supervisory and enforcement matters.
“Responsible conduct is in the public interest. Entities that build a culture of compliance and engage in responsible conduct support consumer protection and the Bureau’s efforts to both prevent harm to consumers and enforce the law against bad actors,” Director Kraninger said.
The CFPB’s proposed whistleblower legislation would amend Title X of the Dodd-Frank Act and provide authority to establish a whistleblower award program. In essence, the program would incentivize whistleblowers to contact the CFPB by providing a whistleblower that provides voluntary information leading to a successful enforcement action with an award based on a percentage of the monetary sanction collected.
The CFPB believes the incentive created for employees to report wrongdoing will assist in advancing enforcement cases, especially as it relates to fair lending violations. “We  want to incentivize whistleblowers to contact us if they believe their employer is not complying with the law,” said Director Kraninger.
Consumer financial products and services providers should be aware of these developments and how they could potentially affect their business. A properly implemented advisory opinion program should lead to greater clarity into the CFPB’s interpretation of its rules and more regulatory certainty regarding what is or is not a violation. Such entities should engage in and document responsible business conduct to better secure leniency from the CFPB in the supervisory and enforcement context. The development of a whistleblower program could lead to increased enforcement activity and impact the content of civil investigative demands based on such tips.