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Rules and Regulations Federal Register

64389 

Vol. 78, No. 209 

Tuesday, October 29, 2013 

1 77 FR 74625 (Dec. 17, 2012). 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Chapter X 

[Docket No. CFPB–2012–0046] 

Policy To Encourage Trial Disclosure 

Programs; Information Collection 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Notice of policy. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is issuing 

its Policy to Encourage Trial Disclosure 

Programs (Policy), which is intended to 

carry out the Bureau’s authority under 

of the Dodd-Frank Wall Street Reform 

and Consumer Protection Act of 2010 

(Dodd-Frank Act). 

DATES: The Policy is effective on 

October 29, 2013. 

FOR FURTHER INFORMATION CONTACT: For 

additional information about the Policy, 

contact Will Wade-Gery, Division of 

Research, Markets and Regulations, 

Consumer Financial Protection Bureau, 

at (202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

In subsection 1032(e) of the DoddFrank Act, 12 U.S.C. 5532(e), Congress 

gave the Bureau authority to provide 

certain legal protections to companies to 

conduct trial disclosure programs. This 

authority can be used to help further the 

Bureau’s statutory objective, stated in 

subsection 1021(b)(5) of the Act, to 

‘‘facilitate access and innovation’’ in the 

‘‘markets for consumer financial 

products and services.’’ 

In line with this authority, the Bureau 

is publishing the Policy that is laid out 

in full in the final section of this Notice. 

Under its terms, if the Bureau approves 

a specific trial, then, for the duration of 

an agreed testing period, the Bureau will 

deem a testing company’s disclosure, to 

the extent that it is used in accordance 

with the terms and conditions approved 

by the Bureau, to be in compliance with, 

or hold it exempt from, applicable 

federal disclosure requirements. The 

Bureau believes that there may be 

significant opportunities to enhance 

consumer protection by facilitating 

innovation in financial products and 

services and enabling companies to 

research informative, cost-effective 

disclosures. The Bureau also recognizes 

that in-market testing, involving 

companies and consumers in real world 

situations, may offer particularly 

valuable information with which to 

improve disclosure rules and model 

forms. 

II. Overview of Public Comments 

On December 17, 2012, the Bureau 

published a notice inviting the general 

public and other Federal agencies to 

comment on any aspect of its proposed 

Policy to Encourage Trial Disclosure 

Programs (the Proposed Policy).1 The 

Bureau received eighteen formal 

comments on the Proposed Policy. 

Industry trade associations and other 

industry groups submitted nine 

comment letters. Financial services 

providers submitted three comment 

letters. There were three comment 

letters from consumer groups. 

Individuals also submitted a further 

three comments. 

All commenters supported the stated 

goals of the Proposed Policy. Most 

comments asked for clarification or 

further detailing around specific parts of 

the Proposed Policy. Some urged 

changes to the Proposed Policy either to 

create more incentives for the regulated 

community to participate in trial 

disclosure programs or to provide for 

additional consumer protections in 

approved tests. One comment opposed 

implementation of the Proposed Policy, 

at least in its current form; this 

commenter also disputed the Bureau’s 

legal authority for certain aspects of the 

Proposed Policy. 

III. Summary of Comments, Bureau 

Response, and Resulting Policy 

Changes 

This section provides a summary of 

the comments received by subject 

matter. It also summarizes the Bureau’s 

assessment of the comments by subject 

matter and, where applicable, describes 

the resulting changes that the Bureau is 

making in the final Policy. With some 

specific exceptions, the Bureau has not 

made changes to the substance of the 

Policy. In response to certain comments, 

however, it has revised the Policy to 

provide additional clarity and 

elaboration around a number of specific 

points. 

A. Legal Authority 

As noted in the Proposed Policy, 

Section 1032(e) of the Dodd-Frank Act 

gives the Bureau authority to permit 

trial programs that are designed to 

‘‘improve upon’’ existing disclosures. 

One consumer group contended that the 

Proposed Policy exceeds the Bureau’s 

legal authority in two respects: (1) By 

not requiring trial disclosure programs 

to meet the criteria for model forms 

prescribed by the Bureau under Section 

5532(b) of the Act, 12 U.S.C. 5532(b); 

and (2) by potentially permitting trial 

disclosure programs that are designed to 

test cost savings alone. The Bureau 

believes both contentions lack legal 

merit. 

Section 5532(b)(1) authorizes the 

Bureau to issue model forms that ‘‘may 

be used at the option of a covered 

person.’’ Section 5532(b)(2) sets forth 

three ‘‘minimum’’ features such model 

forms must possess. These provisions 

do not limit the trial disclosures that the 

Bureau may approve under Section 

5532(e). In that provision, Congress gave 

the Bureau authority to permit testing of 

disclosures that violate disclosure 

requirements imposed directly on 

covered persons by the Bureau. There is 

no textual or other reason to think that 

Congress intended the Bureau’s 

authority under Section 5532(e) to be 

circumscribed by Section 5532(b). 

Indeed, adding the Section 5532(b)(2) 

criteria to the Policy arguably would 

frustrate Congress’ purposes in enacting 

Section 5532(e). Thus, a proposal to 

change a delivery mechanism, as 

opposed to the content of the disclosure, 

would not track against the criteria for 

a model form. Yet there is nothing in 

Section 1032(e) to suggest that Congress 

intended to exclude changed delivery 

mechanisms from the list of potential 

improvements. As a matter of policy, 

however, to the extent a proposal 

includes revised disclosures, the Bureau 

believes those should meet the stated 

1032(b)(2) criteria of plain language, 

clear format and design, and 


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2 12 U.S.C. 5532(e)(2); see also n.17 infra. 

succinctness. The Policy has been 

revised to make that point. 

The Bureau also sees no legal or 

policy reason to eliminate costeffectiveness as a sufficient criterion for 

an ‘‘improved’’ disclosure. In the 

Bureau’s view, a trial disclosure that is 

intended to maintain the same level of 

consumer understanding but in a more 

cost effective manner counts as an 

improved disclosure. Under the Policy, 

however, the Bureau will not approve 

any trial disclosure that it believes will 

weaken consumer understanding of 

valuable information that is the focus of 

a regulatory obligation. That outcome is 

not one that the Policy is intended to 

enable, and the Bureau has revised the 

Policy to make that clear. 

B. Approval Process 

Most comments concerned the 

approval process for trial disclosure 

programs. Comments focused on the 

areas identified below. 

1. Cost-Sharing 

Several trade associations and 

financial services companies questioned 

whether, in light of the costs involved 

in designing and implementing trial 

disclosure programs, companies will 

have sufficient incentive to use the 

Policy. For the most part, however, 

these commenters did not urge more 

streamlined application or participation 

procedures. Instead, they requested a 

clear indication from the Bureau that 

several covered persons—potentially 

facilitated by a trade organization—may 

properly spread the costs of 

participation among themselves, thereby 

improving the incentive to participate. 

Some trade associations noted that 

absent such collaboration, industry 

participants would lack the resources to 

conduct a trial program. 

The Bureau would welcome 

collaboration and cost-sharing, and it 

has clarified the final Policy to this 

effect. To help ensure adequate 

protection for consumers, however, the 

Bureau must know the identity of each 

specific in-market tester before 

approving that entity’s participation. As 

a result, the Bureau will not give final 

approval to any proposed trial 

disclosure unless the entities involved 

are specifically identified. At the same 

time, however, the Bureau sees no 

reason why a single trial disclosure 

program may not properly be proposed 

and implemented by more than one 

covered person. In fact, as both industry 

and consumer commenters noted, multiparty tests may offer more robust and 

reliable results. By the same token, the 

Policy should not be read to prevent a 

trade association—or indeed any other 

entity, including non-profit groups or 

third-party vendors—from helping to 

facilitate cost-spreading. 

In addition, the Policy does not rule 

out the possibility of the Bureau 

conditionally approving a particular 

disclosure for testing without at that 

point requiring the specific identity of 

all participants. In this kind of staggered 

approval arrangement, there would be a 

follow-on process for specific testers to 

secure approval to use the disclosure. 

But even if the Bureau were to stage 

approval in this manner, the Policy 

would still not permit a particular tester 

to claim the benefit of a waiver unless 

the Bureau ultimately approves it by 

name as a test participant. 

2. Development Costs 

Citing the costs of developing a 

proposal and implementing a trial 

disclosure program, several commenters 

urged the Bureau to permit covered 

persons to contact the Bureau to discuss 

a proposal before they submit complete 

applications. This initial contact could 

help companies avoid the costs of 

developing proposals that are unlikely 

to meet with the Bureau’s approval, 

whether because of the merits of the 

proposal or because the Bureau is close 

to approving a duplicative proposal. 

The Policy is not intended to limit this 

kind of initial contact. The present 

Policy is one component part of the 

Bureau’s Project Catalyst initiative, 

which invites companies to bring 

innovation-related concerns to the 

Bureau’s attention at ProjectCatalyst@

cfpb.gov. Disclosure innovators, 

therefore, may use that point of contact 

to request a preliminary discussion of a 

potential trial disclosure proposal. 

3. Iterative Testing 

Several commenters, including 

industry and consumer group 

commenters, suggested that the Policy 

accommodate iterative testing of 

disclosures. The Bureau acknowledges 

that in some cases, iterative testing, 

using relatively small test populations, 

may help refine and improve disclosure 

concepts. Instead of a single, larger test, 

of a preset disclosure, this kind of 

approach involves a sequence of smaller 

tests that enable ongoing improvements 

to a test disclosure concept. Both forms 

of testing may serve well in different 

contexts, and the Bureau intends for the 

Policy to support both approaches. 

In cases where iterative testing is 

appropriate, therefore, the Bureau will 

follow a staggered approach to waiver 

approval. At an initial stage, an iterative 

proposal should follow all the normal 

terms of the Policy, with the exception 

that it may not include all forms of the 

disclosure to be tested, to the extent that 

these are unknown at the point of initial 

submission. Any such proposal should 

explain why iterative testing is the more 

effective means of proceeding with 

respect to the particular disclosure. If 

the Bureau approves the program, an 

initial waiver will then cover the first 

test disclosure, and the Bureau will 

commit in the Terms and Conditions 

document governing that waiver to 

consider later iterations of the test 

disclosure for follow-on waivers on a 

defined fast-track basis. The Policy 

thereby enables iterative testing, where 

it is appropriate, while also ensuring 

that each tested disclosure is 

specifically authorized. 

4. Additional Safeguards 

Notice and Comment 

Several consumer groups asked that 

the Policy require that all proposed 

disclosures be subject to full notice and 

comment. In contrast, a financial service 

provider cautioned that such a 

procedure would dissuade companies 

from proposing trial disclosure 

programs because it would add 

considerable time and expense to the 

process. In the Bureau’s assessment, 

requiring notice and comment for each 

proposed disclosure would conflict with 

Congress’s instruction to issue standards 

and procedures ‘‘designed to encourage 

covered persons to conduct trial 

disclosure programs.’’ (12 U.S.C. 

5532(e)(2).) The Bureau believes that it 

is highly unlikely that covered persons 

would be willing to subject proposals to 

full notice and comment, not least 

because of the extended time period 

involved. In addition, a test disclosure 

does not represent a proposed Bureau 

rule. Test results could help the Bureau 

to put forward proposed rule changes, 

but full notice and comment would then 

apply at that point. 

Other Safeguards 

Consumer groups also proposed that 

tests be approved only when there is no 

statutory liability associated with the 

disclosure process. In addition, they 

proposed that no in-market tests 

proceed until after ‘‘lab-based’’ 

qualitative testing of each proposed 

disclosure. 

The Bureau does not agree that tests 

should be limited to disclosures for 

which non-compliance carries no 

statutory liability. Section 1032(e) 

authorizes the Bureau to apply a timelimited safe harbor with respect to 

disclosure requirements under ‘‘a rule 

or an enumerated consumer law.’’ 2 It 

does not limit this authority to statutes 


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Federal Register / Vol. 78, No. 209 / Tuesday, October 29, 2013 / Rules and Regulations 64391 

(or rules) that impose no liability. In 

addition, while statutory liability may 

well indicate that a disclosure is 

intended to prevent severe consumer 

harm, as the commenters reasonably 

contend, that does not argue against 

testing for disclosure improvement. The 

more important the role of disclosure in 

preventing harm, the more important it 

is to improve disclosures as much as 

possible. If 1032(e) were used only 

where disclosure does not matter to 

consumer welfare, its purpose would go 

unrealized. 

The Bureau agrees with commenters 

that qualitative testing will often be a 

useful means of showing that a 

disclosure is worth testing. That is not 

a compelling reason, however, to make 

qualitative testing an absolute 

requirement for test approval. The 

approval process calls for reasonable 

grounds to expect the revised 

disclosures to represent an 

improvement. In many cases, those 

grounds will consist—at least in part— 

of qualitative test results. But that need 

not always be the case. Other grounds 

could certainly supply a sufficient basis 

for expecting improved outcomes. 

Similar disclosures may have been used 

and shown to be effective for related 

consumer financial products, or prior 

research may offer reasonable grounds 

to believe the revised disclosure will be 

an improvement. 

5. Guidance on Bureau Disclosure 

Priorities 

Some commenters asked the Bureau 

to identity priority areas for potential 

tests. The Bureau does not rule out 

taking this step at some point in the 

future. In considering ways to improve 

disclosure policy, the Bureau may in the 

future identify one or more areas as 

particularly appropriate for testing. 

C. Legal Protection 

1. Waiver Scope 

Several trade associations and 

industry participants asked the Bureau 

to clarify the scope of the safe harbor 

that will be provided to approved 

participants. In particular, they asked 

whether the waivers would shield 

participants from (i) private litigation by 

consumers and (ii) enforcement or other 

proceedings by other regulators. 

The Bureau recognizes that Section 

1032(e) will not provide the incentive to 

test new disclosures that Congress 

intended unless the scope of any 

approved waivers is clear. Entities that 

the Bureau approves for a waiver—so 

long as their conduct accords with the 

terms of approval—should not face 

private liability exposure for violating 

those provisions of a federal disclosure 

statute or rule that the Bureau identifies 

as being within the scope of the waiver. 

Because such a waiver deems the trial 

disclosure to be in compliance with or 

exempt it from the provisions identified 

by the Bureau, there is no basis under 

those provisions for a private suit based 

on the company’s use of the disclosure. 

The same rationale applies to other 

federal and state regulators even if they 

have enforcement or supervisory 

authority as to the ‘‘enumerated 

consumer laws’’ for which the Bureau 

has rulemaking authority. When a 

Bureau-issued waiver is in effect, there 

can be no predicate for an enforcement 

or supervisory action by such a 

regulator that is both based on statutory 

or regulatory provisions that are within 

the scope of the waiver and against a 

company with an approved program in 

compliance with the terms of the 

wavier. 

It is true that certain other federal 

regulators may, in certain 

circumstances, issue rules that overlap 

with the Bureau’s rules. (See, e.g., 12 

U.S.C. 5581(b)(5))(D).) When 

considering a waiver, therefore, the 

Bureau will confer, as appropriate, with 

other federal regulators. Similarly, 

although the Bureau lacks authority to 

waive state disclosure requirements, the 

Bureau will endeavor to work with state 

regulators, as appropriate, to secure 

their support for a particular trial 

disclosure program. The Bureau also 

encourages participants to confer with 

other federal and state regulators where 

a proposed disclosure implicates 

requirements administered by such 

regulators. In addition, submissions may 

properly indicate whether other 

regulators have indicated support or 

opposition to the proposal. 

2. Affirmative Bureau Statements 

Finally, several commenters asked the 

Bureau to state that disclosures 

approved under the Policy are not 

deceptive. The Bureau does not intend 

to approve test disclosures that it 

considers deceptive. As a result, the 

Bureau anticipates being able to make 

this kind of statement when it publishes 

notice of a waiver. In either case, 

however, the Bureau’s determination 

would be provisional. Unless and until 

otherwise indicated, the Bureau’s 

statement or waiver would apply only to 

disclosures that an approved party made 

under the terms of that particular 

approved trial disclosure program. 

3. Waiver Revocation 

The Proposed Policy specified that if 

the Bureau decides to revoke or partially 

revoke a waiver for failure to follow the 

waiver’s terms, it: (i) Will do so in 

writing, specifying the reason or reasons 

for its action; and (ii) may offer an 

opportunity to correct any such failure 

before revoking a waiver. Several 

commenters found these procedural 

protections insufficient and requested 

that they be enhanced in various ways. 

The Bureau acknowledges that 

entities may reasonably request some 

opportunity to dispute grounds for a 

potential revocation. Before determining 

to issue a revocation, therefore, the 

Bureau will notify the company of its 

grounds for its potential revocation, and 

permit the company an opportunity to 

respond, consistent with the terms of 

this Policy. The Policy has been 

clarified to this effect. 

D. Public Disclosure 

Commenters raised two public 

disclosure concerns. 

1. Consumer Awareness of Tests 

Citing protocols for conducting 

research on human subjects, consumer 

groups urged that consumers be given 

the chance to opt out of test 

participation. They also requested that 

test disclosures be clearly identified as 

such. One industry submission 

suggested that the Bureau inform 

consumers after the fact of their 

participation in a test. 

The Bureau does not agree that 

standard practice argues for requiring 

consumer consent in this context. Inmarket testing of consumer behavior 

and reactions to new products or new 

ways of delivering services is a constant 

of modern life. Companies routinely 

carry out such tests using their customer 

base, without consumer consent or 

awareness. The fact that companies 

must share test results with the Bureau 

does not compel a different outcome 

here. As the statute makes clear, 1032(e) 

tests are still conducted by covered 

persons. 

Furthermore, there is very good 

reason not to identify test disclosures at 

the time of delivery. As one commenter 

observed, disclosures only work to the 

extent consumers read them. A critical 

test of any disclosure’s effectiveness, 

therefore, is whether consumers decide 

to read it in any given case. As a result, 

if consumers are told that a disclosure 

is for a test, it will no longer be possible 

to test for the most basic and controlling 

component of disclosure effectiveness. 

Moreover, requiring such disclosure 

would be in tension with Congress’s 

recognition in section 1032 that public 

disclosure of programs may 

appropriately be limited in order to 


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3 12 U.S.C. 5532(e)(3). 

4 Indirect notice that consumers may receive a 

test disclosure will already be provided by the 

Bureau’s Web site publication of approved test 

disclosures. 

5See 12 U.S.C. 5532(a)–(d). 

6 12 U.S.C. 5532(e). 

7 12 U.S.C. 5532(e)(2). For convenience, this 

statutory authority to deem companies in 

compliance with or to exempt them from disclosure 

requirements—in each case for a limited period of 

time—is hereinafter referred to as the authority to 

issue ‘‘waivers’’ for approved programs. 

8The Bureau may permit a covered person or 

covered persons to conduct a trial disclosure 

program ‘‘subject to specified standards and 

procedures.’’ 12 U.S.C. 5532(e)(1). 

9The Policy is not intended to nor should it be 

construed to: (1) Restrict or limit in any way the 

CFPB’s discretion in exercising its authorities; (2) 

constitute an interpretation of law; or (3) create or 

confer upon any covered person (including one 

who is the subject of CFPB supervisory, 

investigation or enforcement activity) or consumer, 

any substantive or procedural rights or defenses 

that are enforceable in any manner. Of course, if the 

Bureau approves a waiver in connection with a trial 

disclosure program, the terms of its approval will 

specify certain legal rights granted to the recipient 

or recipients of the waiver with respect to that 

program. Those rights, however, are based on the 

approval notice, and not on the present policy 

guidance. 

10The Policy should not be viewed as 

substituting for the normal process of rulemaking. 

In the event that information learned from trial 

disclosure programs triggers or otherwise informs 

follow-on rulemaking, the Bureau would follow the 

standard rulemaking process, which affords the 

public the opportunity of submitting comments on 

a proposed regulation. 

encourage the conduct of ‘‘effective’’ 

tests.3

The Bureau has considered requiring 

companies to alert consumers that they 

are in a test population—regardless of 

whether the consumers are in a control 

group or in the group to receive a test 

disclosure.4 This type of notification, 

potentially supplemented by an opt-out 

option, would create equivalency 

between the two groups. At the same 

time, however, it would prevent 

effective testing in many cases. All 

consumers would be alerted to the fact 

of disclosure testing, and their conduct 

upon receiving disclosures would likely 

change as a result. In the Bureau’s 

assessment, the benefit of this direct 

notice, weighed against the cost of 

preventing effective testing and 

associated disclosure improvements, 

does not warrant a categorical rule 

requiring direct disclosure of testing to 

test populations. To the extent that 

companies can find ways to provide 

notice or an opt-out option that do not 

risk the effectiveness of potential tests, 

however, the Bureau encourages them to 

do so. 

2. Disclosure of Test Results 

Several consumer groups urged that 

all test results be made public. After 

careful consideration, the Bureau has 

decided not to revise the Proposed 

Policy to this effect. Congress has 

directed that public disclosure be 

limited as necessary to encourage 

covered persons to conduct effective 

tests. (See 12 U.S.C. 5532(e)(3).) In the 

Bureau’s assessment, requiring testing 

companies to commit, a priori, to 

complete public disclosure of test 

results may unproductively discourage 

valuable potential programs that stand 

to benefit consumers. Some of the 

information provided to the Bureau may 

comprise trade secrets or other 

confidential business information. 

Testing companies will ultimately need 

to permit public use of test results if 

those results are to enable regulatory 

change. An incentive to public 

disclosure, therefore, is built into the 

structure of the program. Particularly 

against that background, additional 

categorical rules could reduce the 

incentive to propose potentially 

valuable trial disclosure programs. In 

addition, the absence of a categorical 

rule does not preclude the Bureau from 

seeking a particular level of disclosure 

in connection with any particular 

proposal. 

E. Other Considerations 

Commenters also requested 

clarification on a number of discrete 

issues. 

1. Delivery Form 

The Bureau confirms that disclosure 

improvements may properly consist of 

revised forms of delivery, not simply 

changes to the content of disclosures. 

This was already covered at footnote 7 

of the Proposed Policy. It is now 

reflected in the eligibility criteria listed 

in Section A of the final Policy. 

2. Electronic Submission 

Submissions for approval can be 

made via electronic means. Submitters 

can use the Project Catalyst email 

address. The Policy has been revised 

accordingly. 

3. Bureau Monitoring of Consumer 

Harm 

Several consumer groups requested 

that the Bureau monitor tests for 

potential harm to consumers. The 

Proposed Policy already called for 

proposals to include plans to mitigate 

any harm identified. To further address 

the concern raised, however, the Bureau 

has amended the eligibility criteria to 

include both an identification of any 

risks of consumer harm that may be 

associated with the proposed program 

and a description of how the program 

mitigates any such risks. 

IV. Final Policy 

The text of the final Policy is as 

follows. 

Consumers need timely and 

understandable information to make the 

financial decisions that they believe are 

best for themselves and their families. 

Much federal consumer protection law, 

therefore, rests on the assumption that 

accurate and effective disclosures will 

help Americans understand the costs, 

benefits, and risks of different consumer 

financial products and services. In 

Section 1032 of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (Dodd-Frank Act), Congress gave the 

Consumer Financial Protection Bureau 

(Bureau) authority to develop rules to 

ensure that consumers receive such 

disclosures, as well as model forms to 

help companies comply with those 

rules.5

In subsection 1032(e) of the DoddFrank Act, Congress also gave the 

Bureau authority to approve ‘‘trial 

disclosure programs.’’ 6 This authority 

can be used to help further the Bureau’s 

statutory objective, stated in subsection 

1021(b)(5) of the Dodd-Frank Act, to 

‘‘facilitate access and innovation’’ in the 

‘‘markets for consumer financial 

products and services.’’ In particular, 

Congress empowered the Bureau to 

provide a legal ‘‘safe harbor’’ to 

companies testing revised disclosures. 

For disclosure trials it approves, 

therefore, the Bureau will, for a defined 

period, ‘‘deem’’ a participating company 

‘‘to be in compliance with,’’ or 

‘‘exempt’’ from identified federal 

disclosure requirements.7 The Bureau 

believes that there may be significant 

opportunities to enhance consumer 

protection by facilitating innovation in 

financial products and services through 

enabling responsible companies to 

research informative, cost-effective 

disclosures in test programs. We also 

recognize that ‘‘in-market’’ testing, 

involving companies and consumers in 

real world situations, may offer 

particularly valuable information with 

which to improve disclosure rules and 

model forms. 

Accordingly, the Bureau is issuing its 

Policy on trial disclosure programs.8

Our intent is for the Policy to encourage 

banks, thrifts, credit unions, and other 

financial services companies to innovate 

by proposing and conducting such 

programs, consistent with the 

protections for consumers that are 

described in this Policy.9 The 

information that companies generate by 

such programs may then help the 

Bureau to establish more effective 

disclosure rules and practices.10

The policy has four sections: 


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11The Bureau will accept proposals that involve 

testing by more than one company. Each testing 

company must be approved by name and must be 

a signatory to specific waiver terms, as described 

further in Section C below. Although not every 

testing company need be identified in an initial 

application, no company can test subject to a 

waiver unless and until it has obtained—and 

become a signatory to—specific Bureau approval to 

test a given disclosure. The Bureau will not provide 

that approval unless it is satisfied, in its sole 

discretion, that a company has met all eligibility 

requirements for approval and should be approved 

for the applicable testing program under the terms 

of this Policy. 

12So long as otherwise consistent with the 

minimum eligibility standards, a proposal could 

include modifications to an existing model form or 

other disclosures, changed delivery mechanisms, 

replacement of a model form or existing disclosure 

requirements with new disclosure or forms, and/or 

the elimination of select disclosure requirements. 

All proposals should include a copy of the trial 

disclosures to be tested, a description of what they 

would replace, and a clear statement of how they 

would be provided to consumers. When proposals 

consist of revised disclosure content—as opposed to 

revised or streamlined delivery mechanisms—that 

content should be in plain language, reflect a clear 

format and design, and be succinct. 

If a proposal is for iterative testing, it should 

include copies of all forms of the disclosure that are 

known at the time of initial submission. It should 

explain why iterative testing is the more effective 

means of proceeding with respect to the particular 

disclosure concept. In addition, it should include 

a proposal for a streamlined approval process for 

different iterations of the disclosure. Again, no 

disclosure can be subject to a waiver under Section 

1032(e) unless the specific tester has been approved 

to test that specific disclosure. 

13The relevant existing disclosures are those 

made in accordance with disclosure rules issued 

either under the authority of Section 1032 or to 

implement an enumerated statute. See 12 U.S.C. 

5532(e)(1). 

14Trial disclosures should be ‘‘designed to 

improve upon’’ existing disclosures. 12 U.S.C. 

5532(e)(1). Intended improvements may go to 

consumer use and understanding of the relevant 

product or service and/or to the cost-effectiveness 

of disclosures. The Bureau anticipates approving 

trial disclosure programs that are intended to 

improve both consumer use and understanding, and 

cost-effectiveness. Although the Bureau considers 

cost-effectiveness an appropriate metric of 

disclosure improvement, it will not approve a trial 

disclosure that it believes will weaken consumer 

understanding of valuable information that is the 

focus of a regulatory obligation, no matter the cost 

savings obtained. 

15Under subsection 1032(e)(2), the Bureau has 

authority to waive ‘‘a requirement of a rule or an 

enumerated consumer law,’’ as that term is defined 

in the Dodd-Frank Act. See 12 U.S.C. 5481(12). As 

used in subsection 1032(e)(2), the term ‘‘rule’’ 

includes: (i) Rules implementing an enumerated 

consumer law; and (ii) rules implementing the 

Consumer Financial Protection Act of 2010, 

including rules promulgated by the Bureau under 

its authority to prevent unfair, abusive, or deceptive 

acts or practices, or to enable full, accurate and 

effective disclosure. 

16The proposal should commit to sharing test 

result data with the Bureau within a reasonable 

period following the end of the program. In 

addition, it should contain either (1) a commitment 

to sharing with the Bureau interim data on test 

results during the course of the program, or (2) an 

explanation for why such interim data cannot 

reasonably be provided. 

17The email subject line should begin ‘‘Trial 

Disclosure Program.’’ The present Policy is one 

component part of the Bureau’s Project Catalyst 

initiative, which invites companies to bring 

innovation-related concerns to the Bureau’s 

attention at ProjectCatalyst@cfpb.gov. Disclosure 

innovators may use the same Project Catalyst point 

of contact to request a preliminary discussion of a 

potential trial disclosure proposal. There are no 

formal submission requirements to request such a 

preliminary discussion. 

18The decision whether to approve a proposed 

program for a waiver will be within the Bureau’s 

sole discretion. The Bureau will review reasonable 

requests to reconsider its position on programs for 

which it has not approved a waiver. 

• Section A describes which 

proposed programs will be considered 

eligible for a temporary waiver; 

• Section B lists factors the Bureau 

will consider in deciding which eligible 

programs to approve for such a waiver; 

• Section C describes the Bureau’s 

procedures for issuing waivers; and 

• Section D describes how we will 

disclose information about these 

programs. 

Paperwork Reduction Act 

According to the Paperwork 

Reduction Act of 1995, an agency may 

not conduct or sponsor, and a person is 

not required to respond to a collection 

of information unless it displays a valid 

OMB control number. The information 

that should be submitted to demonstrate 

eligibility, as described further in 

Section A below, has been deemed to be 

a collection of information for these 

purposes. The OMB control number for 

this collection is 3170–0039. It expires 

on 09/30/2016. The time required to 

complete this information collection is 

estimated to average between 2 and 10 

hours per response, including the time 

for reviewing any instructions, 

searching existing data sources, 

gathering and maintaining the data 

needed, and completing and reviewing 

the collection of information. The 

obligation to respond to this collection 

of information is required to obtain a 

benefit to the extent that the information 

is to establish eligibility for a temporary 

waiver, as described in this policy. 

Comments regarding this collection of 

information, including the estimated 

response time, suggestions for 

improving the usefulness of the 

information, or suggestions for reducing 

the burden to respond to this collection 

should be submitted to Bureau at the 

Consumer Financial Protection Bureau 

(Attention: PRA Office), 1700 G Street 

NW., Washington, DC 20552, or by 

email to CFPB_Public_PRA@cfpb.gov. 

A. Eligibility 

To be considered eligible for a waiver, 

a proposal should: 

1. Identify the testing company or 

companies; 11

2. Describe the new disclosures or 

delivery methods that are to be tested; 12

3. Describe how these changes are 

expected to improve upon existing 

disclosures,13 particularly with respect 

to consumer use, consumer 

understanding, and/or costeffectiveness; 14

4. Provide a reasonable basis for 

expecting these improvements, and 

metrics for testing whether such 

improvements are realized; 

5. Identify the duration of the test and 

the size, location, and nature of the 

consumer population involved in the 

test, and explain why that duration and 

scope are reasonably necessary for 

sound testing; 

6. Identify any risks of consumer 

harm that may be associated with the 

proposed program, describe how the 

program mitigates such risks, and 

explain the testing procedures that will 

be used to assess for potential consumer 

harm during the course of the test; 

7. Identify with particularity which 

provisions of current rules or 

enumerated consumer laws are to be 

temporarily waived in connection with 

the trial disclosure program; 15

8. Identify any third-party vendors to 

be used in connection with the 

proposed program and describe their 

proposed role; 

9. Contain a commitment to and 

schedule for sharing test result data 16

with the Bureau; 

10. Acknowledge that the Bureau may 

revoke any approved waiver if the 

program violates the terms and 

conditions under which the Bureau 

approves the program; and 

11. Explain how the testing company 

will address disclosure requirements for 

the test population at the conclusion of 

the test period. 

All proposals should be submitted via 

email to ProjectCatalyst@cfpb.gov.17

Submitted proposals may be withdrawn 

at any time. 

B. Approval of Proposals for Waivers 

To decide whether to approve a 

proposed program for a waiver,18 the 

Bureau will consider a variety of factors, 

including: 

1. The extent to which the program 

may help the Bureau develop disclosure 

rules or policies that better enable 

consumers to understand the costs, 

benefits, and risks associated with 

consumer financial products or services; 

2. The extent to which the program 

may help the Bureau develop more costeffective disclosure rules or policies; 


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64394 Federal Register / Vol. 78, No. 209 / Tuesday, October 29, 2013 / Rules and Regulations 

19This includes the extent to which a proposal 

contains reasonable contingency plans for 

addressing unanticipated consumer harms that arise 

during the duration of the test. 20 If the Bureau determines not to approve a 

proposed trial program, it will inform the company 

of its determination. 21Before determining to issue a revocation, the 

Bureau will notify the affected company (or 

companies) of the grounds for revocation, and 

permit an opportunity to respond. If the Bureau 

nonetheless determines that the company failed to 

follow the terms of the waiver, it may offer an 

opportunity to correct any such failure before 

revoking the waiver. If the Bureau revokes or 

partially revokes a waiver for failure to follow the 

waiver’s terms, it will do so in writing and it will 

specify the reason or reasons for its action. 

22See 12 CFR 1070 et seq. 

23See 12 CFR 1070.14. 

3. The extent to which the program 

anticipates, controls for, and mitigates 

risks to consumers; 19

4. The strength and record of the 

company’s compliance management 

system relative to the size, nature, and 

complexity of the company’s consumer 

business; 

5. How effectively and efficiently the 

program will test for potential 

improvements to consumer 

understanding and/or the costeffectiveness of disclosures, and how 

narrowly the program is tailored to the 

testing objectives; 

6. The extent to which existing data 

or other evidence indicate that the 

proposed changes will realize the 

intended improvements; and 

7. The extent to which the company 

intends to permit public disclosure of 

test results. 

In reviewing and approving 

applications, the Bureau will also take 

into consideration the scope and nature 

of programs currently underway as well 

as the Bureau’s available resources. 

C. Waiver Procedures for Approved 

Programs 

When the Bureau approves a waiver, 

it will provide the company or 

companies that receive the waiver with 

the specific terms and conditions of its 

approval.20 Waivers will require 

companies to certify, and document or 

otherwise demonstrate to the Bureau, 

their compliance with these approved 

terms and conditions. If a company does 

not follow the terms and conditions of 

the waiver, the Bureau may revoke the 

waiver in whole or in part.21

Waiver terms and conditions will be 

in writing in an integrated document 

entitled ‘‘1032(e) Trial Disclosure 

Waiver: Terms and Conditions.’’ This 

document will be signed by the Director 

of the Bureau or by his or her designee, 

and by an officer of each company 

approved for a waiver in connection 

with the program. 

In addition, the document will: 

1. Identify the company or companies 

that are receiving a waiver; 

2. Specify the new disclosure(s) or 

delivery methods to be used by that 

company or companies under the terms 

of the waiver; 

3. Specify the rules and statutory 

provisions that the Bureau will waive 

during the test period for the testing 

company or companies; 

4. Specify the temporary duration of 

the waiver; 

5. Describe and delineate the test 

population(s); and 

6. Specify any other conditions on the 

effectiveness of the waiver, such as the 

terms of testing, data sharing, 

certification of compliance with the 

terms of the waiver, and/or public 

disclosure. 

D. Bureau Disclosure of Information 

Regarding Trial Programs 

The Bureau will publish notice on its 

Web site of any trial disclosure program 

that it approves for a waiver. The notice 

will: (i) Identify the company or 

companies conducting the trial 

disclosure program; (ii) summarize the 

changed disclosures to be used, their 

intended purpose, and the duration of 

their intended use; (iii) summarize the 

scope of the waiver and the Bureau’s 

reasons for granting it; and (iv) state that 

the waiver only applies to the testing 

company or companies in accordance 

with the approved terms of use. 

Public disclosure of any other 

information regarding trial programs is 

governed by the Bureau’s Rule on 

Disclosure of Records and 

Information.22 For example, the rule 

requires the Bureau to make available 

records requested by the public unless 

they are subject to a FOIA exemption or 

exclusion.23 To the extent the Bureau 

wishes to disclose information regarding 

trial programs, the terms of such 

disclosure will be included in the 

1032(e) Trial Disclosure Waiver: Terms 

and Conditions document. Consistent 

with applicable law and its own rules, 

the Bureau will not seek to disclose any 

test data that would conflict with 

consumers’ privacy interests. 

Dated: October 23, 2013. 

Christopher D’Angelo, 

Chief of Staff, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2013–25580 Filed 10–28–13; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. FAA–2012–1245; Directorate 

Identifier 2012–NE–41–AD; Amendment 39– 

17626; AD 2013–21–02] 

RIN 2120–AA64 

Airworthiness Directives; Lycoming 

Engines and Continental Motors, Inc. 

Reciprocating Engines 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; request for 

comments. 

SUMMARY: We are superseding 

airworthiness directive (AD) 2012–24– 

09 for Lycoming Engines TIO–540– 

AK1A, and Continental Motors, Inc. 

(CMI) TSIO–360–MB, TSIO–360–SB, 

and TSIO–360–RB reciprocating 

engines, with certain Hartzell Engine 

Technologies (HET) turbochargers, 

model TA0411, installed. AD 2012–24– 

09 required removing certain HET 

turbochargers from service before 

further flight. This AD also requires 

removing certain HET turbochargers 

from service before further flight. This 

AD was prompted by a report that an 

additional engine, the CMI LTSIO–360– 

RB, has the affected HET turbochargers 

installed. We are issuing this AD to 

prevent turbocharger turbine wheel 

failure, reduction or complete loss of 

engine power, loss of engine oil, oil fire, 

and damage to the airplane. 

DATES: This AD is effective November 

13, 2013. 

The Director of the Federal Register 

approved the incorporation by reference 

of a certain publication listed in this AD 

as of December 20, 2012 (77 FR 72203, 

December 5, 2012). 

We must receive any comments on 

this AD by December 13, 2013. 

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 

http://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: U.S. Department of 

Transportation, Docket Operations, M– 

30, West Building Ground Floor, Room 

W12–140, 1200 New Jersey Avenue SE., 

Washington, DC 20590, between 9 a.m. 


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