Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 9261 

1Regulations are commonly referred to as 

legislative rules because regulations have the ‘‘force 

and effect of law.’’ Perez v. Mortgage Bankers 

Association, 575 U.S. 92, 96 (2015). 

2See Chrysler v. Brown, 441 U.S. 281, 302 (1979) 

(quoting the Attorney General’s Manual on the 

Administrative Procedure Act at 30 n.3 (1947) 

(Attorney General’s Manual) and discussing the 

distinctions between regulations and general 

statements of policy, of which supervisory guidance 

is one form). 

3See https://www.consumerfinance.gov/about-us/ 

newsroom/agencies-issue-statement-reaffirmingrole-supervisory-guidance/. 

4While supervisory guidance offers guidance to 

the public on the agencies’ approach to supervision 

under statutes and regulations and safe and sound 

practices, the issuance of guidance is discretionary 

and is not a prerequisite to an agency’s exercise of 

its statutory and regulatory authorities. This point 

reflects the fact that statutes and legislative rules, 

not statements of policy, set legal requirements. 

documents on the same topic and will 

generally limit such multiple issuances going 

forward. 

(vi) The OCC will continue efforts to make 

the role of supervisory guidance clear in 

communications to examiners and to 

supervised financial institutions and 

encourage supervised institutions with 

questions about this statement or any 

applicable supervisory guidance to discuss 

the questions with their appropriate agency 

contact. 

Blake J. Paulson, 

Acting Comptroller of the Currency. 

[FR Doc. 2021–01499 Filed 2–11–21; 8:45 am] 

BILLING CODE 4810–33–P 

FEDERAL RESERVE SYSTEM 

12 CFR Parts 217, 225, 238, and 252 

RIN 7100–AF95 

Amendments to Capital Planning and 

Stress Testing Requirements for Large 

Bank Holding Companies, Intermediate 

Holding Companies and Savings and 

Loan Holding Companies 

AGENCY: Board of Governors of the 

Federal Reserve System (Board). 

ACTION: Technical correction. 

SUMMARY: This document corrects an 

error in amendatory instruction 2 

affecting Part 217 of the Board’s 

Regulation Q published in the Federal 

Register on February 3, 2021. 

DATES: Effective April 5, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Asad Kudiya, Senior Counsel, (202) 

475–6358 or Jonah Kind, Counsel, (202) 

452–2045. You may also contact any of 

the named individuals in the final rule 

document 86 FR 7927 (February 3, 

2021). 

SUPPLEMENTARY INFORMATION: 

Correction 

In final rule FR Doc. 2021–02182, 

published on February 3, 2021, on page 

7938, in the third column, make the 

following corrections to instruction 2, 

amending § 217.11: 

§ 217.11 [Corrected] 

■ 1. In instruction 2.b., the text 

‘‘Revising the paragraph (c) subject 

heading and paragraphs (c)(1)(i) and (ii), 

(c)(1)(iii) introductory text, and (c)(1)(iv) 

introductory text, (c)(1)(v) introductory 

text, and (c)(vi) introductory text; and’’ 

is corrected to read ‘‘Revising the 

paragraph (c) heading and paragraphs 

(c)(1)(i) and (ii), (c)(1)(iii) introductory 

text, (c)(1)(iv) introductory text, (c)(1)(v) 

introductory text, and (c)(1)(vi); and’’ 

■ 2. In instruction 2.c., the text 

‘‘Correctly designating the second 

occurrence of paragraph (c)(1)(v) as 

paragraph (c)(1)(vii); and’’ is corrected 

to read ‘‘Correctly designating the 

second occurrence of paragraph (c)(1)(v) 

as paragraph (c)(1)(vii) and revising it; 

and’’ 

■ 3. In instruction 2.d., the text 

‘‘Revising paragraph (c)(2).’’ is corrected 

to read ‘‘Revising paragraph (c)(2) 

heading, (c)(2)(i) and (c)(2)(ii) 

introductory text’’. 

Ann Misback, 

Secretary of the Board. 

[FR Doc. 2021–02911 Filed 2–11–21; 8:45 am] 

BILLING CODE P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1074 

[Docket No. CFPB–2020–0033] 

RIN 3710–AB02 

Role of Supervisory Guidance 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

adopting a final rule that codifies the 

Interagency Statement Clarifying the 

Role of Supervisory Guidance, issued by 

the Office of the Comptroller of the 

Currency (OCC), Board of Governors of 

the Federal Reserve System (Board), 

Federal Deposit Insurance Corporation 

(FDIC), National Credit Union 

Administration (NCUA), and the Bureau 

(collectively, the agencies) on 

September 11, 2018 (2018 Statement). 

By codifying the 2018 Statement, with 

amendments, the final rule confirms 

that the Bureau will continue to follow 

and respect the limits of administrative 

law in carrying out its supervisory 

responsibilities. The 2018 Statement 

reiterated well-established law by 

stating that, unlike a law or regulation, 

supervisory guidance does not have the 

force and effect of law. As such, 

supervisory guidance does not create 

binding legal obligations for the public. 

Because it is incorporated into the final 

rule, the 2018 Statement, as amended, is 

binding on the Bureau. The final rule 

adopts the rule as proposed without 

substantive change. 

DATES: This final rule is effective on 

March 15, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Bradley Lipton or Christopher Shelton, 

Senior Counsels, Legal Division, (202) 

435–7700. If you require this document 

in an alternative electronic format, 

please contact CFPB_Accessibility@

cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Bureau recognizes the important 

distinction between issuances that serve 

to implement acts of Congress (known 

as ‘‘regulations’’ or legislative rules’’) 

and non-binding supervisory guidance 

documents.1 Regulations create binding 

legal obligations. Supervisory guidance 

is issued by an agency to ‘‘advise the 

public prospectively of the manner in 

which the agency proposes to exercise 

a discretionary power’’ and does not 

create binding legal obligations.2

In recognition of the important 

distinction between rules and guidance, 

on September 11, 2018, the agencies 

issued the Interagency Statement 

Clarifying the Role of Supervisory 

Guidance (2018 Statement) to explain 

the role of supervisory guidance and 

describe the agencies’ approach to 

supervisory guidance.3 As noted in the 

2018 Statement, the agencies issue 

various types of supervisory guidance to 

their respective supervised institutions, 

including, but not limited to, 

interagency statements, advisories, 

bulletins, policy statements, questions 

and answers, and frequently asked 

questions. Supervisory guidance 

outlines the agencies’ supervisory 

expectations or priorities and articulates 

the agencies’ general views regarding 

practices for a given subject area. 

Supervisory guidance often provides 

examples of practices that mitigate risks, 

or that the agencies generally consider 

to be consistent with safety-andsoundness standards or other applicable 

laws and regulations, including those 

designed to protect consumers.4 The 

agencies noted in the 2018 Statement 

that supervised institutions at times 

request supervisory guidance and that 

guidance is important to provide clarity 

9262 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 

5The Administrative Conference of the United 

States (ACUS) has recognized the important role of 

guidance documents and has stated that guidance 

can ‘‘make agency decision-making more 

predictable and uniform and shield regulated 

parties from unequal treatment, unnecessary costs, 

and unnecessary risk, while promoting compliance 

with the law.’’ ACUS, Recommendation 2017–5, 

Agency Guidance Through Policy Statements, 82 

FR 61728, 61734 (Dec. 29, 2017). ACUS also 

suggests that ‘‘policy statements are generally better 

[than legislative rules] for dealing with conditions 

of uncertainty and often for making agency policy 

accessible.’’ Id. ACUS’s reference to ‘‘policy 

statements’’ refers to the statutory text of the APA, 

which provides that notice and comment is not 

required for ‘‘general statements of policy.’’ The 

phrase ‘‘general statements of policy’’ has 

commonly been viewed by courts, agencies, and 

administrative law commentators as including a 

wide range of agency issuances, including guidance 

documents. 

6 5 U.S.C. 553(e). 

7See Petition for Rulemaking on the Role of 

Supervisory Guidance, available at https://

www.consumerfinance.gov/rules-policy/petitionsrulemaking/bpi-aba-petition/. The Petitioners did 

not submit a petition to the NCUA, which has no 

supervisory authority over the financial institutions 

that are represented by Petitioners. The NCUA 

chose to join the Proposed Rule on its own 

initiative. References in the preamble to ‘‘agencies’’ 

therefore include the NCUA. 

8 85 FR 70512 (Nov. 5, 2020). 

9The agencies use different terms to refer to 

supervisory actions that are similar to MRAs and 

Matters Requiring Immediate Attention (MRIAs), 

including matters requiring board attention, 

documents of resolution, and supervisory 

recommendations. 

10The 2018 Statement contains the following 

sentence: ‘‘Examiners will not criticize a supervised 

financial institution for a ‘‘violation’’ of supervisory 

guidance.’’ 2018 Statement at 2. As revised in the 

Proposed Rule, this sentence read as follows: 

‘‘Examiners will not criticize (including through the 

issuance of matters requiring attention, matters 

requiring immediate attention, matters requiring 

board attention, documents of resolution, and 

supervisory recommendations) a supervised 

financial institution for, and agencies will not issue 

an enforcement action on the basis of, a ‘‘violation’’ 

of or ‘‘non-compliance’’ with supervisory 

guidance.’’ Proposed Rule (emphasis added). As 

discussed infra in footnote 11, the Proposed Rule 

also removed the sentences in the 2018 Statement 

that referred to ‘‘citation,’’ which the Petition 

suggested had been confusing. These sentences 

were also removed to clarify that the focus of the 

Proposed Rule related to the use of guidance, not 

the standards for MRAs. 

to these institutions, as well as 

supervisory staff, in a transparent way 

that helps to ensure consistency in the 

supervisory approach.5

The 2018 Statement restated existing 

law and reaffirmed the agencies’ 

understanding that supervisory 

guidance does not create binding, 

enforceable legal obligations. The 2018 

Statement reaffirmed that the agencies 

do not issue supervisory criticisms for 

‘‘violations’’ of supervisory guidance 

and described the appropriate use of 

supervisory guidance by the agencies. In 

the 2018 Statement, the agencies also 

expressed their intention to (1) limit the 

use of numerical thresholds in 

guidance; (2) reduce the issuance of 

multiple supervisory guidance 

documents on the same topic; (3) 

continue efforts to make the role of 

supervisory guidance clear in 

communications to examiners and 

supervised institutions; and (4) 

encourage supervised institutions to 

discuss their concerns about 

supervisory guidance with their agency 

contact. 

On November 5, 2018, the OCC, 

Board, FDIC, and Bureau each received 

a petition for a rulemaking (Petition), as 

permitted under the Administrative 

Procedure Act (APA),6 requesting that 

the agencies codify the 2018 Statement.7

The Petition argued that a rule on 

guidance is necessary to bind future 

agency leadership and staff to the 2018 

Statement’s terms. The Petition also 

suggested there are ambiguities in the 

2018 Statement concerning how 

supervisory guidance is used in 

connection with matters requiring 

attention, matters requiring immediate 

attention (collectively, MRAs), as well 

as in connection with other supervisory 

actions that should be clarified through 

a rulemaking. Finally, the Petition 

called for the rulemaking to implement 

changes in the agencies’ standards for 

issuing MRAs. Specifically, the Petition 

requested that the agencies limit the role 

of MRAs to addressing circumstances in 

which there is a violation of a statute, 

regulation, or order, or demonstrably 

unsafe or unsound practices. 

II. The Proposed Rule 

On November 5, 2020, the agencies 

issued a proposed rule (Proposed Rule 

or Proposal) that would have codified 

the 2018 Statement, with clarifying 

changes, as an appendix to proposed 

rule text.8 The Proposed Rule would 

have superseded the 2018 Statement. 

The rule text would have provided that 

an amended version of the 2018 

Statement is binding on each respective 

agency. 

The Petition expressed support for the 

2018 Statement and acknowledged that 

it addresses many issues of concern for 

the Petitioners relating to the use of 

supervisory guidance. The Petition 

expressed concern, however, that the 

2018 Statement’s reference to not basing 

‘‘criticisms’’ on violations of 

supervisory guidance has led to 

confusion about whether MRAs are 

covered by the 2018 Statement. 

Accordingly, the agencies proposed to 

clarify in the Proposed Rule that the 

term ‘‘criticize’’ includes the issuance of 

MRAs and other supervisory criticisms, 

including those communicated through 

matters requiring board attention, 

documents of resolution, and 

supervisory recommendations 

(collectively, supervisory criticisms).9

As such, the agencies reiterated that 

examiners will not base supervisory 

criticisms on a ‘‘violation’’ of or ‘‘noncompliance with’’ supervisory guidance. 

The agencies noted that, in some 

situations, examiners may reference 

(including in writing) supervisory 

guidance to provide examples of safe 

and sound conduct, appropriate 

consumer protection and risk 

management practices, and other 

actions for addressing compliance with 

laws or regulations. The agencies also 

reiterated that they will not issue an 

enforcement action on the basis of a 

‘‘violation’’ of or ‘‘non-compliance’’ 

with supervisory guidance. The 

Proposed Rule reflected these 

clarifications.10

The Petition requested further that 

these supervisory criticisms should not 

include ‘‘generic’’ or ‘‘conclusory’’ 

references to safety and soundness. The 

agencies agreed that supervisory 

criticisms should continue to be specific 

as to practices, operations, financial 

conditions, or other matters that could 

have a negative effect on the safety and 

soundness of the financial institution, 

could cause consumer harm, or could 

cause violations of laws, regulations, 

final agency orders, or other legally 

enforceable conditions. Accordingly, the 

agencies included language reflecting 

this practice in the Proposed Rule. 

The Petition also suggested that 

MRAs, as well as memoranda of 

understanding, examination 

downgrades, and any other formal 

examination mandate or sanction, 

should be based only on a violation of 

a statute, regulation, or order, including 

a ‘‘demonstrably unsafe or unsound 

practice.’’ As noted in the Proposed 

Rule, examiners all take steps to identify 

deficient practices before they rise to 

violations of law or regulation or before 

they constitute unsafe or unsound 

banking practices. The agencies stated 

that they continue to believe that early 

identification of deficient practices 

serves the interest of the public and of 

supervised institutions. Early 

identification protects the safety and 

soundness of banks, promotes consumer 

protection, and reduces the costs and 

risk of deterioration of financial 

condition from deficient practices 

resulting in violations of laws or 

regulations, unsafe or unsound 

conditions, or unsafe or unsound 

banking practices. The Proposed Rule 

also noted that the agencies have 

different supervisory processes, 

including for issuing supervisory 

criticisms. For these reasons, the 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 9263 

11The following sentences from the 2018 

Statement were not present in the Proposed Rule: 

‘‘Rather, any citations will be for violations of law, 

regulation, or non-compliance with enforcement 

orders or other enforceable conditions. During 

examinations and other supervisory activities, 

examiners may identify unsafe or unsound 

practices or other deficiencies in risk management, 

including compliance risk management, or other 

areas that do not constitute violations of law or 

regulation.’’ 2018 Statement at 2. The agencies did 

not intend these deletions to indicate a change in 

supervisory policy. 

12Of the comments received, some comments 

were not submitted to all agencies, and some 

comments were identical. Note that this total 

excludes comments that were directed at an 

unrelated rulemaking by the Financial Crimes 

Enforcement Network of the Department of the 

Treasury (FinCEN). 

agencies did not propose revisions to 

their respective supervisory practices 

relating to supervisory criticisms. 

The agencies also noted that the 2018 

Statement was intended to focus on the 

appropriate use of supervisory guidance 

in the supervisory process, rather than 

the standards for supervisory criticisms. 

To address any confusion concerning 

the scope of the 2018 Statement, the 

Proposed Rule removed two sentences 

from the 2018 Statement concerning 

grounds for ‘‘citations’’ and the 

handling of deficiencies that do not 

constitute violations of law.11

III. Comments on the Proposed Rule 

A. Overview 

The five agencies received 

approximately thirty unique comments 

concerning the Proposed Rule.12 The 

Bureau discusses below those comments 

that are potentially relevant to the 

Bureau, rather than those comments that 

are only potentially relevant to other 

agencies. As one example, the Bureau 

notes that the Federal banking agencies 

(the OCC, Board, and FDIC) received a 

comment regarding their supervisory 

authorities, but the Bureau did not. 

Accordingly, the Bureau does not 

discuss that subject here. 

Commenters representing trade 

associations for banking institutions and 

other businesses, State bankers’ 

associations, individual financial 

institutions, and one member of 

Congress expressed general support for 

the Proposed Rule. These commenters 

supported codification of the 2018 

Statement and the reiteration by the 

agencies that guidance does not have 

the force of law and cannot give rise to 

binding, enforceable legal obligations. 

One of these commenters stated that the 

Proposal would serve the interests of 

consumers and competition by 

clarifying the law for institutions and 

potentially removing ambiguities that 

could deter the development of 

innovative products that serve 

consumers and business clients, without 

uncertainty regarding potential 

regulatory consequences. These 

commenters expressed strong support as 

well for the clarification in the Proposed 

Rule that the agencies will not criticize, 

including through the issuance of 

‘‘matters requiring attention,’’ a 

supervised financial institution for a 

‘‘violation’’ of, or ‘‘non-compliance’’ 

with, supervisory guidance. 

One commenter agreed with the 

agencies that supervisory criticisms 

should not be limited to violation of 

statutes, regulations, or orders and that 

supervisory guidance remains a 

beneficial tool to communicate 

supervisory expectations to the 

industry. The commenter stated that the 

proactive identification of supervisory 

criticism or deficiencies that do not 

constitute violations of law facilitates 

forward-looking supervision, which 

helps address problems before they 

warrant a formal enforcement action. 

The commenter noted as well that 

supervisory guidance provides 

important insight to industry and 

ensures consistency in the supervisory 

approach and that supervised 

institutions frequently request 

supervisory guidance. The commenter 

observed that the COVID–19 pandemic 

has amplified the requests for 

supervisory guidance and 

interpretation, and that it is apparent 

institutions want clarity and guidance 

from regulators. 

Two commenters, both public interest 

advocacy groups, opposed the Proposed 

Rule, suggesting that codifying the 2018 

Statement may undermine the 

important role that supervisory 

guidance can play by informing 

supervisory criticism, rather than 

merely clarifying that it will not serve 

as the basis for enforcement actions. 

One commenter stated that it is essential 

for agencies to have the prophylactic 

authority to base criticisms on 

imprudent bank practices that may not 

yet have ripened into violations of law 

or significant safety and soundness 

concerns. The commenter stated that 

this is particularly important with 

respect to large banks, where delay in 

addressing concerns could lead to a 

broader crisis. One commenter stated 

that the agencies have not explained the 

benefits that would result from the rule 

or demonstrated how the rule will 

promote safety and soundness or 

consumer protection. The commenter 

argued that supervision is different from 

other forms of regulation and requires 

supervisory discretion, which could be 

constrained by the rule. One of these 

commenters argued that the Proposal 

would send a signal that banking 

institutions have wider discretion to 

ignore supervisory guidance. 

In a comment that was specifically 

addressed to the Bureau, a veterans 

advocacy group expressed concern that 

the Bureau’s participation in the 

interagency rule would bind the hands 

of a future administration. 

B. Scope of Rule 

Several industry commenters 

requested that the Proposed Rule cover 

interpretive rules and clarify that 

interpretive rules do not have the force 

and effect of law. One commenter stated 

that the agencies should clarify whether 

they believe that interpretive rules can 

be binding. The commenter argued that, 

under established legal principles, 

interpretive rules can be binding on the 

agency that issues but not on the public. 

Some commenters suggested that the 

agencies follow Administrative 

Conference of the United States (ACUS) 

recommendations for issuing 

interpretive rules and that the agencies 

should clarify when particular guidance 

documents are (or are not) interpretive 

rules and allow the public to petition to 

change an interpretation. A number of 

commenters requested that the agencies 

expand the statement to address the 

standards that apply to MRAs and other 

supervisory criticisms, a suggestion 

made in the Petition. 

One comment that specifically 

pertained to the Bureau, which was 

submitted by an association of 

community banks, recommended that 

the category of supervisory guidance be 

expanded to include the ‘‘small entity 

compliance guides’’ that the Bureau 

provides for small entities, which the 

commenter described as extremely 

helpful. Another comment, from an 

association in the debt-collection 

industry, generally encouraged the 

Bureau to issue small entity compliance 

guides, frequently asked questions, and 

advisory opinions to explain 

compliance expectations. 

C. Role of Guidance Documents 

Several commenters recommended 

that the agencies clarify that the 

practices described in supervisory 

guidance are merely examples of 

conduct that may be consistent with 

statutory and regulations, not 

expectations that may form the basis for 

supervisory criticism. One commenter 

suggested that the agencies state that 

when supervisory guidance or 

interpretive rules offers examples of safe 

and sound conduct, compliance with 

consumer protection standards, 

appropriate risk management practices, 

or acceptable practices through 

supervisory guidance, the agencies will 

9264 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 

13This commenter also requested that the 

agencies affirm that they will apply statutory factors 

while processing applications. The Bureau 

construes this comment, in context, as referring to 

the application processes that are common at the 

Federal banking agencies; to the extent it may refer 

to applications to the Bureau, the Bureau considers 

it outside the scope of the Bureau’s rulemaking. 

treat adherence to that supervisory 

guidance or interpretive rule as 

providing a safe harbor. One commenter 

also requested that the agencies make 

clear that guidance that goes through 

public comment, as well as any 

examples used in guidance, are not 

binding.13

One comment that was specifically 

addressed to the Bureau, from an 

association of credit unions, stated that 

the Bureau should refrain from issuing 

supervisory guidance that adds 

requirements not explicitly stated in the 

statute or regulation. 

One commenter argued that guidance 

provides valuable information to 

supervisors about how their discretion 

should be exercised and therefore plays 

an important role in supervision. 

D. Supervisory Criticisms 

Several commenters addressed 

supervisory criticisms and how they 

relate to guidance. Some commenters 

suggested that supervisory criticisms 

should be specific as to practices, 

operations, financial conditions, or 

other matters that could have a negative 

effect. These commenters suggested that 

MRAs, memoranda of understanding 

and any other formal written mandates 

or sanctions should be based only on a 

violation of a statute or regulation. 

Similarly, these commenters argued that 

there should be no references to 

guidance in written formal actions and 

that banking institutions should be 

reassured that they will not be criticized 

or cited for a violation of guidance when 

no law or regulation is cited. One 

commenter suggested that it would 

instead be appropriate to discuss 

supervisory guidance privately, rather 

than publicly, potentially during the 

pre-exam meetings or during 

examination exit meetings. Another 

commenter suggested that, while 

referencing guidance in supervisory 

criticism may be useful at times, 

agencies should provide safeguards to 

prevent such references from becoming 

the de facto basis for supervisory 

criticisms. One commenter stated that 

examiners also should not criticize 

community banks in their final written 

examination reports for not complying 

with ‘‘best practices’’ unless the 

criticism involves a violation of bank 

policy or regulation. The commenter 

added that industry best practices 

should be transparent enough and 

sufficiently known throughout the 

industry before being cited in an 

examination report. One commenter 

requested that examiners should not 

apply large bank practices to 

community banks that have a different, 

less complex and more conservative 

business model. 

Commenters that opposed the 

Proposal did not support restricting 

supervisory criticism or sanctions to 

explicit violations of law or regulation. 

One commenter expressed concern that 

requiring supervisors to wait for an 

explicit violation of law before issuing 

criticism would effectively erase the 

line between supervision and 

enforcement. According to the 

commenter, it would eliminate the 

space for supervision as an intermediate 

practice of oversight and cooperative 

problem-solving between banks and the 

regulators who support and manage the 

banking system. One commenter 

emphasized the importance of bank 

supervisors basing their criticisms on 

imprudent bank practices that may not 

yet have ripened into violations of laws 

or rules but which if left unaddressed 

could pose harm to consumers. 

One commenter argued that the 

agencies should state clearly that 

guidance can and will be used by 

supervisors to inform their assessments 

of banks’ practices and that it may be 

cited as, and serve as the basis for, 

criticisms. According to the commenter, 

even under the legal principles 

described in the Proposal, it is 

permissible for guidance to be used as 

a set of standards that may inform a 

criticism, provided that application of 

the guidance is used for corrective 

purposes, if not to support an 

enforcement action. 

According to one commenter, the 

Proposal makes fine conceptual 

distinctions between, for example, 

issuing supervisory criticisms ‘‘on the 

basis of’’ guidance and issuing 

supervisory criticisms that make 

‘‘reference’’ to supervisory guidance. 

The commenter suggested that is a 

distinction that it may be difficult for 

regulated entities to parse in practice. 

According to the commenter, a rule that 

makes such a distinction is likely to 

have a chilling effect on supervisors 

attempting to implement policy in the 

field. According to another commenter, 

the language allowing examiners to 

reference supervisory guidance to 

provide examples is too vague and 

threatens to marginalize the role of 

guidance and significantly reduce its 

usefulness in the process of issuing 

criticisms designed to correct deficient 

bank practices. 

E. Issuance and Management of 

Supervisory Guidance 

Several commenters made suggestions 

about how the agencies should issue 

and manage supervisory guidance. 

Some commenters suggested that the 

agencies should delineate clearly 

between regulations and supervisory 

guidance. Commenters encouraged the 

agencies to regularly review, update, 

and potentially rescind outstanding 

guidance. One commenter suggested 

that the agencies rescind outstanding 

guidance that functions as rule but has 

not gone through notice and comment. 

One commenter suggested that the 

agencies memorialize their intent to 

revisit and potentially rescind existing 

guidance, as well as limit multiple 

guidance documents on the same topic. 

Commenters suggested that supervisory 

guidance should be easy to find, readily 

available, online, and in a format that is 

user-friendly and searchable. 

One commenter encouraged the 

agencies to issue principles-based 

guidance that avoids the kind of 

granularity that could be misconstrued 

as binding expectations. According to 

this commenter, the agencies can issue 

separate frequently asked questions 

with more detailed information but 

should clearly identify these as nonbinding illustrations. This commenter 

also encouraged the agencies to publish 

proposed guidance for comment when 

circumstances allow. Another 

commenter requested that the agencies 

issue all ‘‘rules’’ as defined by the 

Administrative Procedure Act through 

the notice-and-comment process. 

One commenter expressed concern 

that the agencies will aim to reduce the 

issuance of multiple supervisory 

guidance documents and will thereby 

reduce the availability of guidance in 

circumstances where guidance would be 

valuable. 

F. Responses to Comments 

As stated in the Proposed Rule, the 

2018 Statement was intended to focus 

on the appropriate use of supervisory 

guidance in the supervisory process, 

rather than the standards for 

supervisory criticisms. The standards 

for issuing MRAs and other supervisory 

actions were, therefore, outside the 

scope of this rulemaking. For this 

reason, and for reasons discussed 

earlier, the final rule does not address 

the standards for MRAs or other 

supervisory actions. 

With respect to the comments on 

coverage of interpretive rules, the 

Bureau agrees with the commenter that 

interpretive rules do not, alone, ‘‘have 

the force and effect of law’’ and must be 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 9265 

14See Mortgage Bankers Association, 575 U.S. at 

96. 15Questions concerning the legal and supervisory 

nature of interpretive rules are case-specific and 

have engendered debate among courts and 

administrative law commentators. The Bureau takes 

no position in this rulemaking on those specific 

debates. See, e.g., R. Levin, Rulemaking and the 

Guidance Exemption, 70 Admin. L. Rev. 263 (2018) 

(discussing the doctrinal differences concerning the 

status of interpretive rules under the APA); see also 

Nicholas R. Parillo, Federal Agency Guidance and 

the Powder to Bind: An Empirical Study of Agencies 

and Industries, 36 Yale J. Reg 165, 168 n.6 (2019) 

(‘‘Whether interpretive rules are supposed to be 

nonbinding is a question subject to much confusion 

that is not fully settled.’’); see also ACUS, 

Recommendation 2019–1: Agency Guidance 

Through Interpretive Rules, 84 FR 38927 (Aug. 8, 

2019) (noting that courts and commentators have 

different views on whether interpretive rules bind 

an agency and effectively bind the public through 

the deference given to agencies’ interpretations of 

their own rules under Auer v. Robbins, 519 U.S. 452 

(1997)). 

16 Mortgage Bankers Association, 575 U.S. at 97 

(citing Shalala v. Guernsey Memorial Hospital, 514 

U.S. 87, 99 (1995)); accord Attorney General’s 

Manual at 30 n.3. 

17See Chrysler v. Brown, 441 U.S. at 302 n.31 

(quoting Attorney General’s Manual at 30 n.3); see 

also, e.g., American Mining Congress v. Mine Safety 

& Health Administration, 995 F.2d 1106, 1112 (D.C. 

Cir. 1993) (outlining tests in the D.C. Circuit for 

assessing whether an agency issuance is an 

interpretive rule). 

18Policy Statement on Compliance Aids, 85 FR 

4579 (Jan. 27, 2020). 

19 Id. at 4579 n.4 (explaining that Bureau 

compliance aids that satisfy the policy statement do 

not rise to the level of ‘‘rules’’ as defined by the 

Administrative Procedure Act and that general 

statements of policy and interpretive rules are 

examples of ‘‘rules’’). 

20 Id. at 4579. 

21 Id. 

22Advisory Opinions Policy, 85 FR 77987, 77988 

(Dec. 3, 2020) (explaining that Bureau advisory 

opinions are interpretive rules under the 

Administrative Procedure Act and explaining 

limitations on advisory opinions). 

rooted in, and derived from, a statute or 

regulation.14 While interpretive rules 

and supervisory guidance are similar in 

lacking the force and effect of law, 

interpretive rules and supervisory 

guidance are distinct under the APA 

and its jurisprudence and are generally 

issued for different purposes.15

Interpretive rules are typically issued by 

an agency to advise the public of the 

agency’s construction of the statutes and 

rules that it administers,16 whereas 

general statements of policy, such as 

supervisory guidance, advise the public 

of how an agency intends to exercise its 

discretionary powers.17 To this end, 

guidance generally reflects an agency’s 

policy views, for example, on risk 

management practices. On the other 

hand, interpretive rules generally 

resolve ambiguities regarding 

requirements imposed by statutes and 

regulations. Because supervisory 

guidance and interpretive rules have 

different characteristics and serve 

different purposes, the Bureau has 

decided that the final rule will continue 

to cover supervisory guidance only. 

With respect to the question of 

whether to adopt ACUS’s procedures for 

allowing the public to request 

reconsideration or revision of an 

interpretive rule, this rulemaking, again, 

does not address interpretive rules. As 

such, the Bureau is not adding 

procedures for challenges to interpretive 

rules through this rulemaking. 

The Bureau is also not adopting the 

comment from an association of 

community banks that the category of 

supervisory guidance be expanded to 

include the ‘‘small entity compliance 

guides’’ that the Bureau provides for 

small entities, which the commenter 

described as extremely helpful. The 

Bureau normally designates its small 

entity compliance guides as 

‘‘compliance aids,’’ pursuant to the its 

Policy Statement on Compliance Aids.18

Compliance aids do not rise to the level 

of supervisory guidance, because they 

are not general statements of policy and 

they do not concern the Bureau’s 

supervisory powers—neither do they 

rise to the level of interpretive rules, 

because they are not interpretive.19

Instead, the Policy Statement on 

Compliance Aids outlines how 

compliance aids simply present the 

requirements of rules and statutes in a 

manner that is useful for compliance 

professionals, other industry 

stakeholders, and the public; 

compliance aids also sometimes include 

practical suggestions for how entities 

might choose to go about complying 

with those rules and statutes.20

Interested parties can consult the Policy 

Statement on Compliance Aids for a 

comprehensive explanation of how the 

Bureau views its compliance aids. 

The Bureau also notes the comment 

from an association in the debtcollection industry that encouraged the 

Bureau to issue small entity compliance 

guides, frequently asked questions, and 

advisory opinions to explain 

compliance expectations. The Bureau 

observes that these particular materials 

are outside the scope of this particular 

rulemaking. This is because the 

Bureau’s small entity compliance guides 

and frequently asked questions are 

generally designated as compliance aids 

and not supervisory guidance under the 

Policy Statement on Compliance Aids,21

while the Bureau’s advisory opinions 

are classified as interpretive rules under 

the Bureau’s Advisory Opinion Policy.22

However, the Bureau agrees that the 

appropriate Bureau use of compliance 

aids and advisory opinions, like 

supervisory guidance, is useful for 

helping entities in the debt-collection 

and other industries to fully comply 

with Federal consumer financial laws. 

In response to the comment that the 

agencies should treat examples in 

guidance as ‘‘safe harbors,’’ the Bureau 

agrees that examples offered in 

supervisory guidance can provide 

insight about practices that, in general, 

may lead to compliance with 

regulations and statutes. The examples 

in guidance, however, are generalized. 

When an institution chooses to 

implement such examples, examiners 

must consider the facts and 

circumstances of that institution in 

assessing the application of those 

examples. In addition, the underlying 

legal principle of supervisory guidance 

is that it does not created binding legal 

obligation for either the public or an 

agency. As such, the Bureau does not 

deem examples in supervisory guidance 

to categorically establish safe harbors. 

The Bureau has also considered the 

comment that was specifically directed 

to the Bureau, from an association of 

credit unions, which stated that the 

Bureau should refrain from issuing 

supervisory guidance that adds 

requirements not explicitly stated in the 

statute or regulation. Although the 

Bureau does not agree that it would be 

appropriate to limit the Bureau’s efforts 

to assist entities in complying with their 

legal obligations to situations where the 

law is already explicit, the Bureau fully 

agrees that it is not the role of 

supervisory guidance to create legal 

requirements. Those must be located in 

a statute or regulation. 

In response to the comments that the 

Proposal may undermine the important 

role that supervisory guidance can play 

in informing supervisory criticism and 

in serving to address conditions before 

those conditions lead to enforcement 

actions, the Bureau agrees that the 

appropriate use of supervisory guidance 

generates a more collaborative and 

constructive regulatory process that 

supports compliance by institutions, 

thereby diminishing the need for 

enforcement actions. As noted by 

ACUS, guidance can make agency 

decision-making more predictable and 

uniform and shield regulated parties 

from unequal treatment, unnecessary 

costs, and unnecessary risk, while 

promoting compliance with the law. 

The Bureau does not view the final rule 

as weakening the role of guidance in the 

supervisory process and the Bureau will 

continue to use guidance in a robust 

way to promote compliance by its 

supervised institutions. 

Further, the Bureau does not agree 

with one commenter’s assertion that the 

Proposal made an unclear distinction 

between, on the one hand, inappropriate 

9266 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 

23Am. Hosp. Ass’n v. Bowen, 834 F.2d 1037, 1045 

(D.C. Cir. 1987). The specific contours of these 

exceptions are the subject of an extensive body of 

case law. 

24Public Law 111–203, 124 Stat. 1376 (2010). 

25 12 U.S.C. 5492(a)(1). 

supervisory criticism for a ‘‘violation’’ 

of or ‘‘non-compliance’’ with 

supervisory guidance, and, on the other 

hand, Bureau examiners’ entirely 

appropriate use of supervisory guidance 

to reference examples of appropriate 

consumer protection and risk 

management practices and other actions 

for addressing compliance with laws or 

regulations. This approach 

appropriately implements the principle 

that institutions are not required to 

follow supervisory guidance in itself but 

may find such guidance useful. The 

Bureau disagrees with the commenter 

that institutions and examiners are 

incapable of understanding this 

important distinction. 

As one example, Bureau examiners 

regularly examine the compliance 

management systems (CMS) at 

supervised institutions. Where 

examiners identify a deficiency in an 

institution’s CMS, examiners may 

provide a supervisory recommendation 

or other supervisory criticism to the 

institution to correct the deficiency at 

that institution. It is also appropriate for 

Bureau examiners to refer to relevant 

supervisory guidance as an example of 

appropriate CMS, if the examiners 

believe that an institution would find 

such guidance informative. 

In response to the comments 

regarding the role of public comment for 

supervisory guidance, the Bureau notes 

that it has made clear through the 2018 

Statement and in this final rule that 

supervisory guidance (including 

guidance that goes through public 

comment) does not create binding, 

enforceable legal obligations. Rather, the 

Bureau may issue supervisory guidance 

for comment in order to improve its 

understanding of an issue, gather 

information, or seek ways to achieve a 

supervisory objective most effectively. 

Similarly, examples that are included in 

supervisory guidance (including 

guidance that goes through public 

comment) are not binding on 

institutions. Rather, these examples are 

intended to be illustrative of ways a 

supervised institution may implement 

appropriate consumer protection, 

prudent risk management, or other 

actions in furtherance of compliance 

with laws or regulations. Relatedly, the 

Bureau does not agree with one 

comment that it should use notice-andcomment procedures, without 

exception, to issue all ‘‘rules’’ as defined 

by the APA, which would include 

supervisory guidance. Congress has 

established longstanding exceptions in 

the APA from the notice-and-comment 

process for certain rules, including for 

general statements of policy like 

supervisory guidance and for 

interpretive rules. As one court has 

explained, Congress intended to 

‘‘accommodate situations where the 

policies promoted by public 

participation in rulemaking are 

outweighed by the countervailing 

considerations of effectiveness, 

efficiency, expedition and reduction in 

expense.’’ 23

In response to the question raised by 

some commenters concerning potential 

confusion between supervisory 

guidance and interpretive rules, the 

Bureau notes that interpretive rules are 

outside the scope of the rulemaking. In 

addition, as stated earlier, interpretative 

rules do not, alone, ‘‘have the force and 

effect of law’’ and must be rooted in, 

and derived from, the statutes and 

regulations those rules interpret. While 

interpretive rules and supervisory 

guidance are similar in lacking the force 

and effect of law, interpretive rules and 

supervisory guidance are distinct under 

the APA and its jurisprudence and are 

generally issued for different purposes. 

The Bureau believes that when it issues 

an interpretive rule, the fact that it is an 

interpretive rule is generally clear. In 

addition, these comments relate to 

clarity in drafting, rather than a matter 

that seems suitable for rulemaking. 

In response to the two public interest 

advocacy groups opposing the Proposal, 

the Bureau does not believe that this 

final rule would undermine any of the 

Bureau’s authorities. Indeed, the final 

rule is designed to support the Bureau’s 

ability to supervise. In addition, the 

Bureau notes the question of the role of 

guidance has been one of interest to 

regulated parties and other stakeholders 

over the past few years. The Petition 

and the numerous comments on the 

Proposal are a sign of this interest. As 

such, the Bureau believes it will serve 

the public interest to reaffirm the 

appropriate role of supervisory 

guidance. There are inherent benefits to 

the supervisory process whenever 

institutions and examiners have a clear 

understanding of their roles, including 

how supervisory guidance can be used 

effectively within legal limits. And in 

response to the concern from the 

veterans advocacy group that the 

Bureau’s participation in the 

interagency Proposed Rule would bind 

the hands of a future administration, the 

Bureau notes that it is the nature of 

binding regulations that they bind an 

agency over time across multiple 

administrations. Most importantly, it 

does not believe that there is anything 

in the final rule that would prevent the 

Bureau from continuing to vigorously 

carry out its statutory supervisory 

functions in the interests of consumers, 

while respecting legal limits. Therefore, 

the Bureau is proceeding with the rule 

as proposed. 

In response to the commenter 

expressing concern that language in the 

Statement on reducing multiple 

supervisory guidance documents on the 

same topic will limit the Bureau’s 

ability to provide valuable guidance, the 

Bureau assures the commenter that this 

language will not inhibit the Bureau 

from issuing new supervisory guidance 

when appropriate. 

Finally, the Bureau appreciates the 

other comments related to other aspects 

of guidance or the supervisory process, 

but the Bureau does not believe that 

they are best addressed in this 

rulemaking. 

IV. The Final Rule 

For the reasons discussed above, the 

final rule adopts the Proposed Rule 

without substantive change. 

However, the Bureau has decided to 

issue a final rule that is specifically 

addressed to the Bureau and Bureausupervised institutions, rather than the 

joint version that the five agencies 

included in their joint Proposal. 

Although many of the comments were 

applicable to all of the agencies, some 

comments were specific to particular 

agencies or to groups of agencies. 

Having separate final rules has enabled 

agencies to better focus on explaining 

any agency-specific issues to their 

respective audiences of supervised 

institutions and agency employees. 

Relatedly, the Bureau has omitted 

from the final rule those specific 

phrases that are inapplicable to the 

Bureau, because they pertain to the 

safety-and-soundness responsibilities of 

the Federal banking agencies and the 

NCUA. The Bureau believes that this 

will provide greater clarity about how 

the rule applies to the Bureau’s 

supervisory functions. 

V. Administrative Law Matters 

A. Dodd-Frank Act 

The Bureau issues this final rule 

based on the Bureau’s authorities under 

sections 1012(a)(1) and 1022(b)(1) of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank 

Act).24 Section 1012(a)(1) authorizes the 

Bureau to establish rules for conducting 

the general business of the Bureau, in a 

manner not inconsistent with title X of 

the Dodd-Frank Act.25 Section 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 9267 

26 12 U.S.C. 5512(b)(1). 

27 12 U.S.C. 5512(b)(2)(B). The prudential 

regulators are the OCC, Board, FDIC, and NCUA. 

See 12 U.S.C. 5481(24) (defining ‘‘prudential 

regulators’’). 

28Section 1022(b)(2)(A) of the Dodd-Frank Act, 

12 U.S.C. 5512(b)(2)(A), requires the Bureau to 

consider the potential benefits and costs of the 

regulation to consumers and covered persons, 

including the potential reduction of access by 

consumers to consumer financial products or 

services; the impact of the proposed rule on insured 

depository institutions and credit unions with no 

more than $10 billion in total assets as described 

in section 1026 of the Dodd-Frank Act, 12 U.S.C. 

5516; and the impact on consumers in rural areas. 

29 12 U.S.C. 5514. 

30 12 U.S.C. 5515. 31 12 U.S.C. 5514(e), 5515(d), 5516(e). 32 12 U.S.C. 5516. 

1022(b)(1) authorizes the Bureau to 

issue rules as may be necessary or 

appropriate to enable the Bureau to 

administer and carry out the purposes 

and objectives of the Federal consumer 

financial laws.26 The Bureau determines 

that the additional clarity regarding the 

status of supervisory guidance provided 

by the final rule will enable the Bureau 

to carry out its supervisory 

responsibilities under Federal consumer 

financial law more effectively. 

Consistent with section 1022(b)(2)(B) 

of the Dodd-Frank Act, in developing 

the final rule, the Bureau has consulted, 

or offered to consult with, the 

prudential regulators and the Federal 

Trade Commission, including regarding 

consistency with any prudential, 

market, or systemic objectives 

administered by those agencies.27

Additionally, consistent with section 

1022(b)(2)(A) of the Dodd-Frank Act, the 

Bureau has considered the potential 

benefits, costs, and impacts of the final 

rule.28 The Bureau requested comment 

on the preliminary analysis presented in 

the proposal as well as submissions of 

additional data that could inform the 

Bureau’s analysis of the benefits, costs, 

and impacts. Such comments as the 

Bureau received on this subject are 

discussed below. 

Institutions Affected by the Final 

Rule. The Bureau’s final rule applies to 

supervisory guidance issued by the 

Bureau, which is addressed to those 

institutions that are subject to the 

Bureau’s supervisory authority. 

Accordingly, the final rule may affect 

those nondepository institutions that are 

subject to the Bureau’s supervisory 

authority under section 1024 of the 

Dodd-Frank Act.29 It may also affect 

those insured depository institutions 

and insured credit unions that have 

more than $10 billion in total assets, 

together with their affiliates, which are 

subject to the Bureau’s supervisory 

authority under section 1025 of the 

Dodd-Frank Act.30 The final rule may 

additionally affect service providers that 

are subject to the Bureau’s supervisory 

authority.31

Potential Benefits and Costs to 

Consumers and Covered Persons. The 

final rule reiterates the Interagency 

Statement Clarifying the Role of 

Supervisory Guidance (2018 Statement), 

which is already the policy of the 

Bureau, and makes it binding on the 

Bureau. The Bureau evaluates the final 

rule against a baseline in which no such 

rule is adopted, and the Bureau is 

therefore less definitively bound to 

implement the 2018 Statement in all 

supervisory activities. Accordingly, the 

final rule provides the relevant 

institutions with additional assurance 

that the Bureau’s implementation of 

current and future supervisory guidance 

will follow the 2018 Statement. 

The final rule should provide the 

relevant institutions with greater 

certainty about legal obligations that are 

addressed in supervisory guidance. This 

in turn may reduce compliance costs. It 

is not feasible, however, to quantify or 

monetize this benefit. The Bureau can 

only speculate on the greater certainty 

about legal obligations and the 

reduction in compliance costs due to 

the final rule. Further, the benefit from 

the greater certainty about legal 

obligations pertains to future as well as 

current supervisory guidance. The 

Bureau can only speculate on the 

frequency of future supervisory 

guidance. Supervisory guidance is 

issued from time to time as the need 

arises, and the Bureau cannot forecast 

the volume and nature of future 

supervisory guidance with sufficient 

precision to quantify or monetize this 

benefit. 

The final rule may also indirectly 

benefit those consumers that are 

customers of the relevant institutions, if 

reduced compliance costs translate into 

better terms or availability of consumer 

financial products and services. For the 

reasons given above, this benefit cannot 

be quantified or monetized. 

A commenter criticized the benefits 

discussed above and in the Proposal, 

deeming them implausible and 

speculative, and argued that there is no 

link between reduced compliance costs 

and consumer welfare. The Bureau 

disagrees with this assessment. While 

the Bureau does not have data to 

quantify or monetize the benefit of 

increased clarity, as a matter of logic 

and economic theory increased legal 

clarity can reduce compliance costs of 

regulated entities. Where there is 

uncertainty as to the requirements of the 

law, firms subject to the Bureau’s 

supervisory authority may undertake 

excess costs to ensure compliance. To 

the extent that the 2018 Statement has 

prompted financial institutions to avoid 

unnecessary compliance costs in cases 

that comply with applicable laws and 

regulations and do not harm consumers, 

but technically contravene the Bureau’s 

supervisory guidance, the final rule will 

further lower those costs by reducing 

the uncertainty. With respect to the 

criticism that compliance costs are not 

necessarily linked to consumer welfare, 

the Bureau notes that its burden under 

section 1022(b)(2)(A) is to consider costs 

and benefits to covered persons as well 

as to consumers. Moreover, as noted 

above, a reduction in unnecessary 

compliance costs can be passed through 

to consumers in the form of lower costs 

of credit. 

Finally, the final rule does not impose 

any new obligations on institutions. 

Thus, the final rule should have no 

costs for institutions. A consumer 

advocate commenter asserted that the 

rule would impose costs on consumers 

by reducing the effectiveness of the 

agencies’ supervision operations, 

leading to potential consumer harm. 

The commenter argued that ambiguities 

in the Proposed Rule and the 

accompanying Statement would make it 

difficult for supervision staff at the 

agencies to determine when to issue 

supervisory criticisms, to the detriment 

of consumers who may be affected by 

practices that would otherwise be 

subject to a supervisor’s criticism. 

However, the Bureau notes that the 2018 

Statement is already the policy of the 

Bureau. Moreover, the rule is intended 

to clarify at least some aspects of the 

2018 Statement. To the extent that the 

ambiguities the commenter identifies 

exist and affect the Bureau’s supervision 

operations, they already exist under the 

baseline. Thus, as noted in the Proposal, 

the effects of the rule, as described 

above, impose no clear costs on any 

consumers. 

Impact on Depository Institutions and 

Credit Unions With No More Than $10 

Billion in Assets. Under section 1026 of 

the Dodd-Frank Act, the Bureau has 

only limited supervisory authority with 

respect to those insured depository 

institutions and insured credit unions 

that have no more than $10 billion in 

total assets,32 and so the Bureau does 

not normally address supervisory 

guidance to these institutions. 

Accordingly, the Bureau does not expect 

there to be any appreciable impact on 

these institutions from the final rule. 

Impact on Access to Credit. The 

Bureau does not expect the final rule to 

affect consumers’ access to credit, 

9268 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 

33 5 U.S.C. 601–612. 

34 5 U.S.C. 609. 

35 44 U.S.C. 3501–3521. 36 5 U.S.C. 801 et seq. 

except to the extent that reduced 

compliance costs and additional 

assurance, relative to the baseline, that 

the Bureau will follow the 2018 

Statement in the future might indirectly 

make some credit more available, as 

discussed above. 

Impact on Consumers in Rural Areas. 

The Bureau does not believe that the 

final rule would have any unique 

impact on consumers in rural areas, and 

so the impact on these consumers 

should be similar to consumers 

generally. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

generally requires an agency to conduct 

an initial regulatory flexibility analysis 

(IRFA) and a final regulatory flexibility 

analysis (FRFA) of any rule subject to 

notice-and-comment rulemaking 

requirements, unless the head of the 

agency certifies that the rule will not, if 

promulgated, have a significant 

economic impact on a substantial 

number of small entities.33 The Bureau 

also is subject to certain additional 

procedures under the RFA involving the 

convening of a panel to consult with 

small business representatives prior to 

proposing a rule for which an IRFA is 

required.34 In the Proposal, the Bureau 

determined that an IRFA and small 

business review panel was not required 

because the Director of the Bureau 

certified the Proposed Rule, if adopted, 

would not have a significant economic 

impact on a substantial number of small 

entities. The Bureau explained that the 

Proposed Rule would not impose any 

obligations on regulated entities, and 

regulated entities would not need to 

take any action in response to this 

Proposed Rule. The Bureau did not 

receive comments on its analysis of the 

impact of the Proposal on small entities. 

Accordingly, the Director of the Bureau 

certifies that the final rule will not have 

a significant economic impact on a 

substantial number of small entities. 

C. Paperwork Reduction Act 

The Bureau has determined that this 

final rule does not impose any new or 

revise any existing recordkeeping, 

reporting, or disclosure requirements on 

covered entities or members of the 

public that would be collections of 

information requiring approval by the 

Office of Management and Budget under 

the Paperwork Reduction Act.35

D. Congressional Review Act 

Pursuant to the Congressional Review 

Act 36 the Bureau will submit a report 

containing this rule and other required 

information to the United States Senate, 

the United States House of 

Representatives, and the Comptroller 

General of the United States prior to the 

rule taking effect. The Office of 

Information and Regulatory Affairs 

(OIRA) has designated this rule as not 

a ‘‘major rule’’ as defined by 5 U.S.C. 

804(2). 

E. Signing Authority 

The Director of the Bureau, Kathleen 

L. Kraninger, having reviewed and 

approved this document, is delegating 

the authority to electronically sign this 

document to Grace Feola, a Bureau 

Federal Register Liaison, for purposes of 

publication in the Federal Register. 

List of Subjects in 12 CFR Part 1074 

Administrative practice and 

procedure. 

Authority and Issuance 

For the reasons set forth above, the 

Bureau amends 12 CFR part 1074 as set 

forth below: 

PART 1074—RULEMAKING AND 

GUIDANCE 

■ 1. The authority citation for part 1074 

continues to read as follows: 

Authority: 12 U.S.C. 5492(a)(1), 5512(b). 

■ 2. The heading to part 1074 is revised 

as set forth above. 

■ 3. Add a heading for new subpart A 

to read as follows: 

Subpart A—Procedure for Issuance of 

Bureau Rules 

§ 1074.1 [Designated as Subpart A] 

■ 4. Designate § 1074.1 as new subpart 

A. 

■ 5. Add subpart B, consisting of 

§§ 1074.2 and 1074.3, to read as follows: 

Subpart B—Use of Supervisory 

Guidance 

Sec. 

1074.2 Purpose. 

1074.3 Implementation of the Statement 

Clarifying the Role of Supervisory 

Guidance. 

§ 1074.2 Purpose. 

The Bureau issues regulations and 

guidance as part of its supervisory 

function. This subpart reiterates the 

distinctions between regulations and 

guidance, as stated in the Statement 

Clarifying the Role of Supervisory 

Guidance (appendix A to this part) 

(Statement), and provides that the 

Statement is binding on the Bureau. 

§ 1074.3 Implementation of the Statement 

Clarifying the Role of Supervisory 

Guidance. 

The Statement describes the official 

policy of the Bureau with respect to the 

use of supervisory guidance in the 

supervisory process. The Statement is 

binding on the Bureau. 

■ 6. Appendix A to part 1074 is added 

to read as follows: 

Appendix A to Part 1074—Statement 

Clarifying the Role of Supervisory 

Guidance 

Statement Clarifying the Role of Supervisory 

Guidance 

The Bureau is issuing this statement to 

explain the role of supervisory guidance and 

to describe the Bureau’s approach to 

supervisory guidance. 

Difference Between Supervisory Guidance 

and Laws or Regulations 

Supervisory agencies like the Bureau issue 

various types of supervisory guidance, 

including interagency statements, advisories, 

bulletins, policy statements, questions and 

answers, or frequently asked questions, to 

their respective supervised institutions. A 

law or regulation has the force and effect of 

law.1 Unlike a law or regulation, supervisory 

guidance does not have the force and effect 

of law, and the Bureau does not take 

enforcement actions based on supervisory 

guidance. Rather, supervisory guidance 

outlines the Bureau’s supervisory 

expectations or priorities and articulates the 

Bureau’s general views regarding appropriate 

practices for a given subject area. Supervisory 

guidance often provides examples of 

practices that the Bureau generally considers 

consistent with applicable laws and 

regulations, including those designed to 

protect consumers. Supervised institutions at 

times request supervisory guidance, and such 

guidance is important to provide insight to 

industry, as well as supervisory staff, in a 

transparent way that helps to ensure 

consistency in the supervisory approach. 

Ongoing Efforts To Clarify the Role of 

Supervisory Guidance 

The Bureau is clarifying the following 

policies and practices related to supervisory 

guidance: 

• The Bureau intends to limit the use of 

numerical thresholds or other ‘‘bright-lines’’ 

in describing expectations in supervisory 

guidance. Where numerical thresholds are 

used, the Bureau intends to clarify that the 

thresholds are exemplary only and not 

suggestive of requirements. The Bureau will 

continue to use numerical thresholds to 

tailor, and otherwise make clear, the 

applicability of supervisory guidance or 

programs to supervised institutions, and as 

required by statute. 

• Examiners will not criticize (through the 

issuance of matters requiring attention, 

matters requiring immediate attention, 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Rules and Regulations 9269 

matters requiring board attention, documents 

of resolution, and supervisory 

recommendations) a supervised financial 

institution for, and the Bureau will not issue 

an enforcement action on the basis of, a 

‘‘violation’’ of or ‘‘non-compliance’’ with 

supervisory guidance. In some situations, 

examiners may reference (including in 

writing) supervisory guidance to provide 

examples of appropriate consumer protection 

and risk management practices and other 

actions for addressing compliance with laws 

or regulations. 

• Supervisory criticisms should continue 

to be specific as to practices, operations or 

other matters that could cause consumer 

harm or could cause violations of laws, 

regulations, final agency orders, or other 

legally enforceable conditions. 

• The Bureau may decide to seek public 

comment on supervisory guidance. Seeking 

public comment on supervisory guidance 

does not mean that the guidance is intended 

to be a regulation or have the force and effect 

of law. The comment process helps the 

Bureau to improve its understanding of an 

issue, to gather information on institutions’ 

risk management practices, or to seek ways 

to achieve a supervisory objective most 

effectively and with the least burden on 

institutions. 

• The Bureau will aim to reduce the 

issuance of multiple supervisory guidance 

documents on the same topic and will 

generally limit such multiple issuances going 

forward. 

• The Bureau will continue efforts to make 

the role of supervisory guidance clear in 

communications to examiners and to 

supervised financial institutions and 

encourages supervised institutions with 

questions about this statement or any 

applicable supervisory guidance to discuss 

the questions with their appropriate agency 

contact. 

Dated: January 19, 2021. 

Grace Feola, 

Federal Register Liaison, Bureau of Consumer 

Financial Protection. 

[FR Doc. 2021–01524 Filed 2–11–21; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2021–0027; Project 

Identifier MCAI–2021–00048–R; Amendment 

39–21425; AD 2021–04–04] 

RIN 2120–AA64 

Airworthiness Directives; Airbus 

Helicopters 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: The FAA is superseding 

Airworthiness Directive (AD) 2020–19– 

02, which applied to certain Airbus 

Helicopters (previously Eurocopter 

France) Model SA330J helicopters. AD 

2020–19–02 required repetitively 

inspecting affected tail rotor (T/R) 

blades and depending on the inspection 

results, repairing or replacing the T/R 

blade. AD 2020–19–02 also prohibited 

installing an affected T/R blade unless 

it passed the inspections. This AD 

retains the requirements of AD 2020– 

19–02 and also clarifies the 

applicability, clarifies the affected T/R 

blades in the required actions, reduces 

a compliance time, and corrects the 

prohibition requirement. This AD was 

prompted by the determination that 

these corrections are necessary. The 

FAA is issuing this AD to address the 

unsafe condition on these products. 

DATES: This AD becomes effective 

March 1, 2021. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain document listed in this AD 

as of October 7, 2020 (85 FR 59416, 

September 22, 2020). 

The FAA must receive comments on 

this AD by March 29, 2021. 

ADDRESSES: You may send comments, 

using the procedures found in 14 CFR 

11.43 and 11.45, by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov. Follow the 

instructions for submitting comments. 

• Fax: (202) 493–2251. 

• Mail: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE, 

Washington, DC 20590. 

• Hand Delivery: Deliver to Mail 

address above between 9 a.m. and 5 

p.m., Monday through Friday, except 

Federal holidays. 

For service information identified in 

this final rule, contact Airbus 

Helicopters, 2701 N Forum Drive, Grand 

Prairie, TX 75052; telephone 972–641– 

0000 or 800–232–0323; fax 972–641– 

3775; or at https://www.airbus.com/ 

helicopters/services/technicalsupport.html. You may view this service 

information at the FAA, Office of the 

Regional Counsel, Southwest Region, 

10101 Hillwood Pkwy., Room 6N–321, 

Fort Worth, TX 76177. For information 

on the availability of this material at the 

FAA, call (817) 222–5110. It is also 

available at https://www.regulations.gov 

by searching for and locating Docket No. 

FAA–2021–0027. 

Examining the AD Docket 

You may examine the AD docket at 

https://www.regulations.gov by 

searching for and locating Docket No. 

FAA–2021–0027; or in person at Docket 

Operations between 9 a.m. and 5 p.m., 

Monday through Friday, except Federal 

holidays. The AD docket contains this 

final rule, the European Aviation Safety 

Agency (now European Union Aviation 

Safety Agency) (EASA) AD, any 

comments received, and other 

information. The street address for 

Docket Operations is listed above. 

FOR FURTHER INFORMATION CONTACT: Matt 

Fuller, AD Program Manager, General 

Aviation & Rotorcraft Unit, 

Airworthiness Products Section, 

Operational Safety Branch, FAA, 10101 

Hillwood Pkwy., Fort Worth, TX 76177; 

telephone (817) 222–5110; email 

matthew.fuller@faa.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA issued AD 2020–19–02, 

Amendment 39–21243 (85 FR 59416, 

September 22, 2020) (AD 2020–19–02), 

for certain Airbus Helicopters 

(previously Eurocopter France) Model 

SA330J helicopters. AD 2020–19–02 

required, for each T/R blade part 

number (P/N) 330A12–0005–(all dash 

numbers) and 330A12–0006–(all dash 

numbers), repetitively accomplishing a 

visual and in-depth inspection for 

debonding and eddy current inspecting 

for a crack. If there was debonding 

within allowable limits, AD 2020–19–02 

required repairing or replacing the T/R 

blade. If there was debonding that 

exceeded allowable limits or a crack, 

AD 2020–19–02 required replacing the 

T/R blade. AD 2020–19–02 also 

prohibited installing an affected T/R 

blade unless it passed the inspections. 

AD 2020–19–02 was prompted by EASA 

AD No. 2016–0059–E, dated March 22, 

2016 (EASA AD 2016–0059–E), issued 

by the EASA, which is the Technical 

Agent for the Member States of the 

European Union, to correct an unsafe 

condition for Airbus Helicopters 

(formerly Eurocopter, Eurocopter 

France, Aerospatiale) Model SA 330 J 

helicopters. EASA AD 2016–0059–E 

retains the requirements of Direction 

Ge ́ne ́rale de l’Aviation Civile (DGAC) 

France AD 87–032–052(B)R3, dated 

January 23, 1991, which it supersedes, 

and also mandates improved service 

instructions. EASA advises of two 

reports of cracked metal T/R blade skin, 

which subsequently led to rotor blade 

vibrations and forced landing of the 

helicopter. According to EASA, this 

condition, if not addressed, could result 

in additional occurrences of T/R blade 

structural damage, possibly resulting in 

significant vibrations and reduced 

control of the helicopter.