CFPB Field Hearing: Responding to NPRMs Is Everyone’s Business

Written by FinTech Futures
12th November 2014

Editor’s Note: Paybefore is rerunning this article on the day before the CFPB’s field hearing on prepaid cards because the bureau’s Notice of Proposed Rulemaking for GPR cards is expected to be released this week, and it will be vital to the industry that the CFPB receives as much feedback as possible.

Click here to add tomorrow’s CFPB field hearing on prepaid accounts to your Outlook calendar and watch a live stream of the event.

By Marilyn Bochicchio, CEO

Long ago I was responsible for developing regulatory comment letters for the bank holding company I worked for. I cut my teeth writing comment letters on the very first iteration of Regulation E. From that experience, I developed a life-long interest in the regulatory side of our business, and it’s why I’ve edited Pay Gov since its inception.

Just last week, I learned of a new Website that promotes involvement in writing comment letters to regulators. It’s called the Regulation Room, and it’s sponsored by the Cornell eRulemaking Initiative (CeRI), in the belief that technology can make policymaking more democratic, efficient and effective. The CFPB is a CeRI partner organization, by the way.

If you’re new to the idea of responding to Notice of Proposed Rulemakings (NPRMs) and how regulatory proposals become rules, you’ll want to read the Regulation Room’s neat explanations of:

Why should you participate? “The agency has to take public comments seriously. It must read them and think about them before making its final rule. If someone sues the agency about a new regulation, the courts will look at the explanation to be sure the agency really did take the comments seriously. If not, the courts can send the rule back to the agency for more work.”

What is effective commenting? “The best comments explain not only what the agency should do, but why. One person with some new information, a relevant personal experience or a good idea will have more impact on the outcome than 1,000 people who just say they are for or against a proposed rule.”

Are You Ready to Respond to the CFPB’s NPRM?

Visiting the Regulation Room started me thinking about what’s coming up for the prepaid and emerging payments industry and why it’s a good time for all of us to consider our roles in responding to the upcoming CFPB NPRM on GPR cards (amending Regulation E). Originally scheduled for spring 2014, the NPRM timetable looks like it’s been delayed a month or two, which provides a bit of extra time to gear up and commit to responding.

It is the responsibility of every industry member—as individuals, as part of our organizations and as part of the industry groups in which we participate—to be involved in creating constructive, informative, fact-based responses to the CFPB. This is our opportunity to be a part of the process and, potentially, to make a difference. If we ignore our responsibility and this opportunity, shame on us.

It’s Easy to Be Cynical

As an industry, we’ve been hammered during the past several years by what we perceive as an unending stream of new regulatory issues, changes in the application of regulations and compliance costs. On top of that, it’s been difficult to hear third-party comments suggesting that our industry takes advantage of consumers, because we truly believe that the products we’re offering and what we’re trying to accomplish in the payments space are pro-consumer. And, we’re frustrated when we perceive that some consumer advocates, members of law enforcement and regulators “just don’t get it” and repeat misinformed or biased rhetoric that oftentimes portrays extreme outlier situations as industry norms.

In this environment, it’s easy to be cynical and not want to spend the time responding to an NPRM. It’s also the exact reason we must put cynicism aside and take time to comment on the NPRM.

And, we can’t confuse public political rhetoric with the thoughtful, thorough, intellectual process that goes on behind the scenes within regulatory agencies during the rulemaking process. As the Regulation Room suggests, I believe that constructively written comment letters—with facts and examples—are evaluated fairly by regulators. I also believe that regulators are savvy in balancing consumer and industry commentary.

As we’ve said in past issues of Pay Gov, you don’t have to be a lawyer or hire a lawyer to respond to an NPRM and to make a difference. What resonates is real-world experience in how our industry actually works. And, boots-on-the-ground industry representatives are in the best position to explain these issues constructively to educate regulators.

Will writing an NPRM comment letter ensure we’ll get everything we want in a final rule? Of course not. But, if we present compelling arguments and examples, and if we support the comments made by our colleagues, there is the opportunity to make a significant difference.

Your Trade Groups and Networks

Even if you aren’t able to author an original comment letter, you can play a part in the process. Many trade groups (e.g., the NBPCA, ABA, EFTA) and payments networks develop comment letters you can use in whole or in part to develop your own submission. Rely on what your trade groups/networks create, but leverage their work by using it as the basis for your individual response.

Just Do It!

When regulators issue an NPRM, they’re giving us the opportunity to make a difference, to be part of the process and to influence the outcome. All of us who care about the industry need to take this privilege seriously and to view it as our responsibility to respond to the CFPB in an informed, constructive way. We need to make our views and needs known because if we don’t, other voices will fill the void.

Paybefore will let you know as soon as the NPRM is released. And, if we can support you in your review of the NPRM or structuring your comment letter, please let me know.

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