Consumer Financial Protection Bureau Finalizes Advisory Opinions Policy and Announces Two New Advisory Opinions

WASHINGTON, D.C. – Today, the Consumer Financial Protection Bureau (Bureau) issued its final Advisory Opinions Policy (Policy) to publicly address regulatory uncertainty in the Bureau’s existing regulations and provide guidance to entities on outstanding regulatory uncertainty. Under the final Policy, entities seeking to comply with regulatory requirements can submit a request to the Bureau where uncertainty exists. Regulatory certainty promotes compliance if the law applies and avoids unnecessary compliance costs if the law does not.

Under the final Policy, any person or entity can submit a request for an advisory opinion via email to advisoryopinion@cfpb.gov. The Bureau will review the submissions received, prioritize certain requests for response, and issue opinions with a description of the incoming request. The Bureau may also decide to issue advisory opinions on its own initiative. To increase transparency, the Bureau will publish all advisory opinions in the Federal Register and on its website at: https://www.consumerfinance.gov/compliance/advisory-opinion-program/.

As explained in the final Policy, when selecting requests for consideration, the Bureau will prioritize open questions within the Bureau’s purview that can legally be addressed through an interpretive rule. The Bureau intends to further evaluate potential topics for advisory opinions based on additional factors, including: alignment with the Bureau’s statutory objectives; size of the benefit offered to consumers by resolution of the interpretive issue; known impact on the actions of other regulators; and impact on available Bureau resources.

In addition to the final Policy, the Bureau issued two advisory opinions today. The Bureau issued an advisory opinion regarding earned wage access (EWA) products. Earned wage access products have recently emerged in the marketplace as an innovative way for employees to meet short-term liquidity needs that arise between paychecks without individuals having to turn to other higher cost products. The Bureau has been asked whether EWA providers are offering or extending credit within the scope of Regulation Z. The advisory opinion aims to resolve regulatory uncertainty regarding the applicability of the definition of credit under Regulation Z and encourage further innovation in the EWA space.

The Bureau also issued an advisory opinion to clarify that certain education loan products that refinance or consolidate a consumer’s pre-existing federal, or federal and private, education loans meet the definition of “private education loan” in Truth in Lending Act and Regulation Z and are subject to the disclosure and other requirements in subpart F of Regulation Z. Lender compliance with these requirements will enhance the protection of borrowers who have taken out private educational loans.

A copy of the final advisory opinion program can be found here: https://files.consumerfinance.gov/f/documents/cfpb_advisory-opinion_policy_2020-11.pdf

A copy of the advisory opinion regarding EWA programs can be found here: https://files.consumerfinance.gov/f/documents/cfpb_advisory-opinion_earned-wage-access_2020-11.pdf

A copy of the advisory opinion regarding private education loans can be found here: https://files.consumerfinance.gov/f/documents/cfpb_advisory-opinion_private-education-loans_2020-11.pdf

The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.