I. INTRODUCTION
The Consumer Financial Protection Bureau (CFPB) issued its Policy to Encourage Trial Disclosure Programs (Policy), which are authorized under Section 1032(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). The policy is designed to encourage banks and other financial services companies to innovate by proposing and conducting trial disclosure programs, consistent with the protections for consumers that are described in the Policy. The Policy became effective on October 29, 2013.
II. FINAL POLICY
Under the Dodd-Frank Act, the CFPB has authority to approve “trial disclosure programs.” The CFPB is authorized to provide a legal “safe harbor” to companies testing revised disclosures. For disclosure trials approved by the CFPB, a participating company, for a defined period, will be “deemed to be in compliance with,” or “exempt” from identified federal disclosure requirements. The CFPB believes that there may be significant opportunities to enhance consumer protection by facilitating innovation and financial products and services through enabling responsible companies to research informative, cost-effective disclosures in test programs.
The final Policy has four sections:
A. Eligible Proposals
To be considered eligible for a waiver, a proposal should:
All proposals should be submitted via email to ProjectCatalyst@cfpb.gov.
B. Approval of Proposals for Waivers
To decide whether to approve a proposed program for a waiver, the CFPB will consider a variety of factors, including:
In reviewing and approving applications, the CFPB will also take into consideration the scope and nature of programs currently underway as well as the CFPB’s available resources.
III. WAIVER PROCEDURES FOR APPROVED PROGRAMS
When the CFPB approves a waiver, it will provide the company or companies that receive the waiver with the specific terms and conditions of its approval. Waivers will require companies to certify, and document or otherwise demonstrate to the CFPB, their compliance with these approved terms and conditions. If a company does not follow the terms and conditions of the waiver, the CFPB may revoke the waiver in whole or in part.
Waiver terms and conditions will be in writing in an integrated document entitled “1032(e) Trial Disclosure Waiver: Terms and Conditions.” This document will be signed by the Director of the CFPB or by his or her designee, and by an officer of each company approved for a waiver in connection with the program.
In addition, the document will:
The CFPB has clarified that waivers shield participants from (i) private litigation by consumers and (ii) enforcement or other proceedings by other regulators. Because such waivers deem the trial disclosure to be in compliance with or exempt it from the provisions identified by the CFPB, there is no basis under those provisions for a private suit based on the company’s use of the disclosure. The same rationale applies to other federal and state regulators even if they have enforcement or supervisory authority as to the “enumerated consumer laws” for which the CFPB has rulemaking authority. When a CFPB-issued waiver is in effect, there can be no predicate for an enforcement or supervisory action by such a regulator that is both based on statutory or regulatory provisions that are within the scope of the waiver and against a company with an approved program in compliance with the terms of the wavier.
IV. CFPB DISCLOSURE OF INFORMATION REGARDING TRIAL PROGRAMS
The CFPB will publish notice on its website of any trial disclosure program that it approves for a waiver. The notice will: (i) identify the company or companies conducting the trial disclosure program; (ii) summarize the changed disclosures to be used, their intended purpose, and the duration of their intended use; (iii) summarize the scope of the waiver and the CFPB’s reasons for granting it; and (iv) state that the waiver only applies to the testing company or companies in accordance with the approved terms of use.