The Consumer Financial Protection Bureau (CFPB) will “dramatically” increase its use of regulatory guidance—a device that in the past has been sharply criticized by financial services trade groups and congressional Republicans.
“The CFPB is seeking to move away from highly complicated rules that have long been a staple of consumer financial regulation and towards simpler and clearer rules,” the bureau’s director Rohit Chopra outlined in a statement late last week. In that vein, he explained, the agency will begin issuing additional guidance in a variety of areas.
“The CFPB aspires to more clearly communicate the agency’s expectations in simple and straight-forward terms, which will produce more durable guidance and rules, in addition to numerous other benefits,” Chopra said. “While this task is difficult, we believe it is important to move away from the failed approach of the past.”
He further noted complex guidance and rules impede consumer protection and increase compliance costs. “The CFPB plans to issue guidance in a manner that strengthens the compliance posture of all market participants, not just those with the most market power or resources,” Chopra stated.
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