Tips for Writing Effective Comment Letters
The enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) set in motion a regulatory implementation process of unparalleled size and scope. Banker involvement in the regulatory process will be essential as we respond to the challenges and opportunities of the new law. Below is some information about the comment process and some suggestions for how to prepare an effective comment letter.
Do Comment Letters Actually Make a Difference?
Yes. The agencies benefit from the experience that bankers can offer, particularly when analyzing the burdens of a proposal. While all industry feedback is encouraged, the most persuasive feedback will include data about a proposal's likely impact on banks' ability to meet the needs of their customers. You do not have to write a long letter every time. If only one aspect of the proposal affects your institution, just comment on that part of the proposal. Citing specific concerns or problems in your letter will give more weight to your letter.
What Should Be Included in a Comment Letter?
Below are some things you may wish to include in a comment letter.
Docket number. This will appear near the top of the proposal, and is used by the agencies to keep track of comments.
Introduction. Describe your institution – e.g., size, location, lines of business. Include any other information that is relevant to the proposal.
Main body of the letter.
- Identify the issues that you are commenting on and note whether you support or oppose the item. You do not have to comment on every issue in a proposal.
- Explain what the proposal will mean for your bank. Cost estimates are very effective. Will you have to hire more staff or contract with an outside vendor? Will you have to retrain employees? Will your bank have to reprogram its computers? Will you likely discontinue certain products or services?
- If you believe the costs exceed the likely benefits of a proposal, explain why.
- If possible, suggest a less burdensome alternative.
Will the ABA provide an outline of a suggested comment letter and/or post its letter early for banks to use?
The ABA often will post a summary on the ABA's Regulatory Status Charts of the points we intend to make in our comment letter. We also try to prepare the letter in time to post it on our web site for members to read and use as they see fit.
Are form letters persuasive?
Up to a point. Clearly, it is better for a bank to explain how a proposal will affect that bank specifically, but any feedback is good feedback.
Special Considerations when Commenting on CFPB Regulatory Proposals
DFA transfers rule-writing authority for an enumerated list of consumer protection laws to the Bureau of Consumer Financial Protection (Bureau), delegating to it significant discretion to prescribe such rules "as may be necessary or appropriate" to enable the Bureau to administer federal consumer financial protection law. To balance this broad grant of rulemaking authority, Congress expressly requires the Bureau to consider the potential benefits and costs, the potential reduction of access by consumers to financial products and services, and the impact of the proposed rules on "covered persons," including banks. In addition, DFA amends the Regulatory Flexibility Act to require consideration of "any projected increase in the cost of credit for small entities" arising from a proposed consumer financial protection regulation. Community bankers should leverage this special requirement by illustrating how the proposal you are commenting on impacts you as a small bank.
Accordingly, when commenting on proposed consumer protection regulations proposed by the Bureau, in addition to commenting on the impact of the proposed rule on bank operations and compliance costs, bankers will want to include specific information on the impact of the rule on customers. For example, if a proposed rule will result in a decision stop offering a particular product or service or to delay the introduction of a product or service, that information should be included in your comment letter. Similarly, describe how a proposal may result in less access to bank services for consumers. Where possible, provide estimates of how a proposal may result in increased fees, increased credit costs, and decreased credit availability for consumers and small businesses.
Where Can I Get Information About Proposed Rules?
ABA has a variety of resources available to help bankers stay informed of regulatory proposals. One of the best ways to keep up with DFA regulatory proposals is to subscribe to email or RSS feeds from ABA's Dodd-Frank Tracker. The Dodd-Frank Tracker is a resource that provides current information on Dodd-Frank Act implementation, including notices of new proposals and links to ABA's Regulatory Status Charts. Each Regulatory Status Chart, in turn, includes links to the Federal Register notice, ABA summaries and analysis of the proposed rule, and contact information for the ABA "expert" responsible for drafting ABA's comment letter.
For regulatory proposals unrelated to DFA, ABA email bulletins including the daily email bulletin, Newsbytes, provide information about proposed regulations and links to additional information. Although ABA encourages banker response to each regulatory proposal, there are instances when we believe it is particularly important for the regulators to hear from individual bankers. In these instances, ABA will provide additional guidance – an outline of points bankers may consider – to help each banker formulate an individual letter. Links to these outlines will be available on the Regulatory Proposal Chart and will be publicized through appropriate ABA email bulletins.
ABA Experts on Call
ABA Dodd-Frank Tracker
Regulatory Status Charts
ABA Bank Compliance Magazine
ABA Banking Journal
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