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10.3 Rulemaking Authority

<< Title X Overview

10.3 Rulemaking Authority

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10.3.     Rulemaking Authority.   The Bureau will have authority to issue rules, and issue orders and guidance necessary or appropriate to carry out the purposes of Federal consumer financial laws.  When conducting any rulemaking under the Federal consumer financial laws, including the Designated Laws, the Bureau shall consider the potential benefits and costs to consumers and Covered Persons, including the potential reduction of access to products or services resulting from the rule, and the impact on Covered Persons.[§ 1022]

The Bureau has been expressly granted the Chevron standard of deference with respect to its determination of the meaning or interpretation of any Federal consumer financial law, and amendments to several of the enumerated laws transferred to the Bureau – EFTA, ECOA, and FCRA – mirror this deferential standard of review.[§ 1022]

10.3.1.              Consultation with Other Regulators. The Bureau is required to consult with the appropriate Federal prudential regulators and other Federal agencies prior to proposing a rule, and during the comment period, regarding the consistency of the rule with prudential, market, or systemic objectives administered by those agencies.  The Bureau will be required to publish a description of any objection it receives in the preamble to its final rule, along with the basis for its decision on the objection.     

10.3.2.              Exemptions.   The Bureau may conditionally or unconditionally exempt any class of (i) Covered Persons, (ii) service providers, or (iii) consumer products or services, from any provision of Title X or from any rule issued under the Title.  An exemption will be made in consideration of the total assets of the class of Covered Persons, the volume of transactions involving consumer financial products in which the class of Covered Persons engages, and the extent to which consumers are protected by existing provisions of law.  If both the Bureau and another Federal agency have been authorized by a Federal consumer law to issue regulations, the Bureau will have exclusive authority to issue rules under those provisions of law, except to the extent that the FTC is granted continuing authority under the Act.[§ 1022]

                        10.3.3.              Oversight Council Review of Regulations.  In another effort to address concerns regarding the operation of the Bureau, the Act contains an unusual provision that gives the Oversight Council the authority to make a Bureau regulation unenforceable. This process is triggered if a member of the Oversight Council that has objected to a proposed rule of the Bureau files a timely petition with the Council to stay the effectiveness or set aside a final rule of the Bureau.  A decision to stay or set aside a final rule of the Bureau must be made by the vote of two-thirds of the members of the Council.  In order to set aside a rule or a provision of the rule, the Oversight Council must determine that the rule or the provision would put the safety and soundness of the U.S. banking system or the stability of the financial system of the U.S. at risk.  A decision of the Oversight Council to set aside a rule will be subject to review under the Administrative Procedure Act.  The Oversight Council is required to issue procedural rules regarding the operation of the regulation review process.[§ 1023]