May 27, 2016

ABA challenges CFPB use of generic clearance for overdraft research

From: Ballard Spahr

The American Bankers Association has sent a comment letter to the CFPB challenging the Bureau’s use of the generic clearance process to conduct research in connection with its overdraft rulemaking.  The letter was submitted in response to the CFPB’s request for approval from the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) of an existing generic clearance “to collect quantitative data on effective strategies and consumer experiences….” (Qualitative Consumer Education Generic Clearance).

The CFPB had indicated that the purpose of the Qualitative Consumer Education Generic Clearance was “to develop a deeper understanding of effective financial education and empowerment strategies.”  The ABA asserts that the CFPB “has used this clearance to conduct information collections on substantive and policy-related issues-namely, overdraft services-which is prohibited by the guidance interpreting the PRA that was published by the Office of Information and Regulatory Affairs (OIRA) of the [OMB].”  According to the ABA, this guidance makes such collections subject to the standard PRA clearance process, which requires notice to the public and an opportunity for comment.

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