39112 Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 

be made available for examination by 

the person who produced such material, 

or his or her duly authorized 

representative, during regular office 

hours established for the Bureau. 

§ 1080.14 Confidential treatment of 

demand material and non-public nature of 

investigations. 

(a) Documentary materials, written 

reports, answers to questions, tangible 

things or transcripts of oral testimony 

the Bureau receives in any form or 

format pursuant to a civil investigative 

demand are subject to the requirements 

and procedures relating to the 

disclosure of records and information 

set forth in part 1070 of this title. 

(b) Bureau investigations generally are 

non-public. Bureau investigators may 

disclose the existence of an 

investigation to potential witnesses or 

third parties to the extent necessary to 

advance the investigation. 

Dated: June 4, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–14047 Filed 6–28–12; 8:45 am] 

BILLING CODE 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1082 

[Docket No. CFPB–2011–0005] 

RIN 3170–AA02 

State Official Notification Rule 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: The Dodd-Frank Wall Street 

Reform and Consumer Financial 

Protection Act of 2010 (Dodd-Frank Act) 

requires the Bureau of Consumer 

Financial Protection (Bureau) to 

prescribe rules establishing procedures 

that govern the process by which State 

Officials notify the Bureau of actions 

undertaken pursuant to the authority 

granted to the States to enforce the 

Dodd-Frank Act or regulations 

prescribed thereunder. This final State 

Official Notification Rule (Final Rule) 

sets forth the procedures to govern this 

process. 

DATES: The Final Rule is effective June 

29, 2012. 

FOR FURTHER INFORMATION CONTACT: 

Veronica Spicer, Office of Enforcement, 

Consumer Financial Protection Bureau, 

1700 G Street NW., Washington, DC 

20552, at (202) 435–7545. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Dodd-Frank Wall Street Reform 

and Consumer Financial Protection Act 

of 2010 (Dodd-Frank Act) was signed 

into law on July 21, 2010. Title X of the 

Dodd-Frank Act established the Bureau 

to regulate the offering and provision of 

consumer financial products or services 

under the Federal consumer financial 

laws. Section 1042 of the Dodd-Frank 

Act, 12 U.S.C. 5552, governs the 

enforcement powers of the States under 

the Dodd-Frank Act. Under section 

1042(a), a State attorney general or 

regulator (State Official) may bring an 

action to enforce Title X of the DoddFrank Act and regulations issued 

thereunder. Prior to initiating any such 

action, the State Official is required to 

provide notice of the action to the 

Bureau and the prudential regulator, if 

any, pursuant to section 1042(b) of the 

Dodd-Frank Act. Section 1042(b) further 

authorizes the Bureau to intervene in 

the State Official’s action as a party, 

remove the action to a Federal district 

court, and appeal any order or 

judgment. 

Pursuant to section 1042(c) of the 

Dodd-Frank Act, the Bureau is required 

to issue regulations implementing the 

requirements of section 1042. On July 

28, 2011, the Bureau promulgated the 

State Official Notification Rule (Interim 

Final Rule) with a request for comment. 

The comment period for the Interim 

Final Rule ended on September 26, 

2011. After reviewing and considering 

the issues raised by the comments, the 

Bureau now promulgates the Final Rule 

establishing a procedure for the timing 

and content of the notice required to be 

provided by State Officials pursuant to 

section 1042(b) of the Dodd-Frank Act, 

12 U.S.C. 5552(b). 

II. Summary of the Final Rule 

Like the Interim Final Rule, the Final 

Rule implements a procedure for the 

timing and content of the notice 

required by section 1042(b), sets forth 

the responsibilities of the recipients of 

the notice, and specifies the rights of the 

Bureau to participate in actions brought 

by State Officials under section 1042(a) 

of the Dodd-Frank Act. In drafting the 

Final Rule, the Bureau endeavored to 

create a process that would provide both 

the Bureau and, where applicable, the 

prudential regulators with timely notice 

of pending actions and account for the 

investigation and litigation needs of 

State regulators and law enforcement 

agencies. In keeping with this approach, 

the Final Rule provides for a default 

notice period of at least ten calendar 

days, with exceptions for emergencies 

and other extenuating circumstances, 

and requires substantive notice that is 

both straightforward and 

comprehensive. The Final Rule further 

makes clear that the Bureau can 

intervene as a party in an action brought 

by a State Official under Title X of the 

Dodd-Frank Act or a regulation 

prescribed thereunder, provides for the 

confidential treatment of non-public 

information contained in the notice if a 

State so requests, and provides that 

provision of notice shall not be deemed 

a waiver of any applicable privilege. In 

addition, the Final Rule specifies that 

the notice provisions do not create any 

procedural or substantive rights for 

parties in litigation against the United 

States or against a State that brings an 

action under Title X of the Dodd-Frank 

Act or a regulation prescribed 

thereunder. 

III. Legal Authority 

Section 1042(c) of the Dodd-Frank Act 

authorizes the Bureau to prescribe 

regulations implementing the 

requirements of section 1042(b). In 

addition, the Bureau has general 

rulemaking authority pursuant to 

section 1022(b)(1) of the Dodd-Frank 

Act to prescribe rules to enable the 

Bureau to administer and carry out the 

purposes and objectives of the Federal 

consumer financial laws and to prevent 

evasions thereof. 

IV. Overview of Comments Received 

In response to the Interim Final Rule, 

the Bureau received several comments. 

Four letters were received from 

associations representing the financial 

industry, two letters were received from 

financial industry regulators and 

supervisors, and one letter was received 

from an individual consumer. The 

Bureau also received a comment letter 

from a financial industry regulator in 

response to its Federal Register 

notification of November 21, 2011, 

regarding the information collection 

requirements associated with the 

Interim Final Rule pursuant to the 

Paperwork Reduction Act of 1995 

(PRA), Public Law 104–13. All of the 

comments are available for review on 

www.regulations.gov. 

The financial industry associations’ 

comments fell into several general 

categories. Several comments expressed 

concerns about the Bureau’s ability to 

maintain confidentiality for notification 

materials received by the Bureau. Other 

commenters requested clarity as to the 

type of actions for which the Bureau 

requires notification. One commenter 

requested that the Bureau require 

uniform interpretation by States of all 

Federal law within the Bureau’s 

jurisdiction. 


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The comment letters received from 

industry regulators and supervisors 

focused on several concerns. Several 

commenters requested clarification of 

the types of actions for which the 

Bureau requires notification. The 

commenters also expressed concerns 

about the timing of the notice 

requirement prior to bringing an action, 

and one of the commenters requested 

clarification as to the application of the 

notification requirement to actions 

involving credit unions. 

The comment letter from an 

individual consumer did not contain 

any specific comments or suggestions 

pertaining to the Interim Final Rule. 

The comments received by the Bureau 

are discussed in more detail below in 

part V of the SUPPLEMENTARY

INFORMATION. 

V. Section-by-Section Summary 

Section 1082.1(a) Notice Requirement 

Section 1082.1(a) of the Interim Final 

Rule sets out the timing and process for 

notice by State Officials under nonemergency circumstances. The section 

requires State Officials to provide notice 

no later than ten days prior to initiating 

an action to enforce Title X of the DoddFrank Act or any regulation prescribed 

thereunder. The section also identifies 

to whom and how the notice should be 

sent and sets out an exception to the 

timing of the notice. 

Several commenters asked the Bureau 

to clarify the types of proceedings 

subject to notification under this 

section. Commenters were concerned 

about lack of clarity in the use of the 

term ‘‘action.’’ The commenters noted 

that State regulators often pursue 

various courses of ‘‘action,’’ many of 

which do not rise to the level of a court 

or administrative proceeding, such as 

examination findings, confidential 

memorandums of understanding, 

licensing actions, and other similar 

‘‘actions.’’ Commenters also asked the 

Bureau to clarify when it would 

consider an action to be one for the 

enforcement of any provisions of ‘‘the 

Act or any regulation prescribed 

thereunder’’ pursuant to § 1082.1(a)(1) 

of the Interim Final Rule. Specifically, 

the commenters asked whether notice is 

required when a State Official brings an 

action: (1) Pursuant to an enumerated 

Federal consumer financial law, other 

than Title X, or its implementing 

regulations, which the Bureau now has 

jurisdiction to enforce; or (2) pursuant 

to a State law that is predicated on 

Federal law, specifically Title X, but 

does not bring the action directly under 

Title X. 

The Final Rule amends the Interim 

Final Rule to clarify the types of 

proceedings subject to the notice 

requirement. The Final Rule provides 

that an action requiring notification 

under this section is any adjudicative 

proceeding before a court or an 

administrative or regulatory body to 

determine whether a violation of any 

provision of Title X of the Dodd-Frank 

Act or any regulation prescribed 

thereunder has occurred. 

Initiating an action under this section 

would include, but not be limited to, the 

filing of a complaint, motion for relief, 

or other document which initiates an 

action in a court or administrative or 

regulatory body. The Final Rule does 

not apply, for example, to examination 

findings or licensing proceedings. With 

regards to the substance of actions 

covered, the Final Rule does not apply 

to actions brought under the 

enumerated consumer laws, as defined 

in section 1002(12) of the Dodd-Frank 

Act, or the laws for which authorities 

are transferred to the Bureau under 

subtitles F and H of the Dodd-Frank Act, 

though some of those enumerated 

statutes have their own respective 

notification requirements that must be 

complied with. Nor would the Final 

Rule require notification of actions 

under State laws that are predicated on 

violations of Title X or regulations 

issued thereunder. 

The Bureau, however, encourages 

State Officials to consult with the 

Bureau whenever interpretation of 

Federal consumer financial law, as 

defined in section 1002(14) of the DoddFrank Act, the regulations promulgated 

under Federal consumer financial law, 

or State law predicated on violations of 

Federal consumer financial law is 

relevant to a State regulatory or law 

enforcement matter, even if it is not the 

type of action for which notification is 

required. State Officials are also 

encouraged to consult with the Bureau 

when in doubt as to whether a 

particular anticipated activity is covered 

by this Final Rule. State Officials that 

wish to consult with the Bureau in this 

context may contact the Bureau via 

electronic mail at 

Enforcement@cfpb.gov. 

The Bureau was also asked to clarify 

the application of § 1082.1(a) to covered 

entities approaching the $10 billion 

asset threshold relevant to the Bureau’s 

supervisory authority under sections 

1025 and 1026 of the Dodd-Frank Act or 

to those that fall below the threshold at 

a point in time. Section 1042 of the 

Dodd-Frank Act and paragraph 

1082.1(a) apply to all actions brought by 

State Officials under Title X of the 

Dodd-Frank Act or any regulation 

promulgated thereunder, against any 

covered person, regardless of whether or 

not the entity’s assets are above or 

below the threshold amount. 

The Bureau also received several 

comments raising policy concerns. One 

commenter noted that it would not be 

prudent to impede a regulator’s ability 

to apply the law in a timely manner 

simply because of a ten-day advance 

notice requirement. The Bureau agrees 

that delaying initiation of an action for 

the ten calendar day advance notice 

requirement may not always be in the 

public interest. The Bureau refers State 

Officials to § 1082.1(b), which governs 

Emergency Actions and is intended to 

account for these situations. In addition, 

under § 1082.1(a)(5), the Bureau may set 

an alternative deadline for the notice 

where the State Official demonstrates 

good cause. 

Another commenter recommended 

that the Bureau require uniform 

interpretations of Federal law among 

various regulators at the Federal and 

State levels to discourage State attorneys 

general and other State regulators from 

initiating enforcement actions based on 

interpretations of Federal law that are 

not supported by the Bureau. The 

Bureau believes that it can achieve 

appropriate uniformity through 

notification and intervention, which are 

the mechanisms provided in section 

1042(b) the Dodd-Frank Act. The 

Bureau also has authority to intervene 

in actions as otherwise provided for by 

law (including the Federal Rules of Civil 

Procedure), and may file amicus briefs 

in appropriate circumstances, which 

may assist in the uniform interpretation 

of Federal law. The Bureau, however, 

encourages State Officials and other 

Federal law enforcement agencies to 

consult with the Bureau regarding 

issues related to enforcement of Federal 

consumer financial law, especially the 

Dodd-Frank Act’s prohibition on unfair, 

deceptive and abusive acts and 

practices. The Bureau will make 

resources available through its Office of 

Enforcement to provide consultation on 

such issues as needed, even if the action 

is not one for which the Bureau requires 

notification. Government officials that 

wish to consult with the Bureau in this 

context may contact the Bureau via 

electronic mail at 

Enforcement@cfpb.gov. 

Other commenters recommended 

specific changes to § 1082.1(a) of the 

Interim Final Rule. One commenter 

recommended that the Bureau include 

in its Final Rule a requirement that State 

Officials bringing an action also notify 

‘‘other state regulatory officials,’’ such 

as ‘‘state consumer credit 

commissioners and prudential bank 


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regulators.’’ Another commenter 

recommended that the Bureau amend 

§ 1082.1(a)(3) to require notification of 

prudential regulators by electronic mail 

instead of the current text, which 

permits notice ‘‘by mail or electronic 

mail.’’ 

The Bureau declines to adopt these 

recommendations. First, section 

1042(b)(1) of the Dodd-Frank Act limits 

the recipients of the notice to the 

Bureau and the prudential regulator, if 

any. Section 1002(24) of the Dodd-Frank 

Act defines the term ‘‘prudential 

regulator’’ as certain Federal regulatory 

agencies. While notification to State 

regulators may also be appropriate and 

should be considered by State Officials, 

such notification is within the 

discretion of the State Official. Second, 

the Bureau believes that allowing State 

Officials to notice the prudential 

regulator by regular mail, in addition to 

electronic mail, provides flexibility to 

State Officials subject to the notice 

requirement and will promote 

compliance with this section. 

On its own initiative, the Bureau also 

amended the Final Rule to clarify that 

the State Official has ten calendar days 

prior to initiating the action to provide 

notice. 

The Bureau adopts § 1082.1(a) of the 

Interim Final Rule with the changes 

discussed above. 

Section 1082.1(b) Emergency Actions 

Section 1082.1(b) of the Interim Final 

Rule sets out the process for the 

provision of notice in emergency 

circumstances. The section lays out the 

acceptable reasons for not providing 

notice in accordance with § 1082.1(a), 

and establishes a deadline to provide 

notice of no more than 48 hours after 

the initiation of an action. The section 

also identifies to whom and how the 

notice should be sent and provides an 

exception to the timing of notice. 

The Bureau received two comments 

concerning § 1082.1(b) of the Interim 

Final Rule. One commenter argued that 

the emergency exception was too broad 

and suggested that the Bureau include 

in the Final Rule specific criteria for the 

Bureau’s determination of when an 

emergency exception to the ten-day 

notification requirement is warranted as 

being ‘‘in the public interest.’’ Along 

similar lines, another commenter 

recommended that the Bureau remove 

the ‘‘in the public interest’’ language 

from the Final Rule and suggested that 

the exception to the ten-day notification 

requirement should only be permitted 

when delaying for ten days would cause 

‘‘irreparable and imminent harm or 

similar emergency circumstances.’’ 

The Bureau has made minor technical 

revisions to the Interim Final Rule. 

The Bureau adopts § 1082.1(b) of the 

Interim Final Rule with the changes 

discussed above. The Final Rule reflects 

the Bureau’s view that determinations 

under § 1082.1(b) should be made on a 

case-by-case basis, taking into account 

the particular facts and circumstances of 

each case and that it is not necessary to 

include in the Final Rule specific 

criteria for determining when an 

emergency exception to the ten-day 

notice requirement is warranted as 

being ‘‘in the public interest.’’ The 

Bureau encourages State Officials to 

consult with the Office of Enforcement 

to determine instances when the 

emergency exception may apply. 

Section 1082.1(c) Contents of Notice 

In § 1082.1(c) of the Interim Final 

rule, the Bureau specifies the 

information that must be included in 

the notice provided by State Officials. 

This section also details certain 

additional information that must be 

provided when notice is not given until 

after an action has been initiated. 

One commenter asked the Bureau to 

clarify the term ‘‘materially different’’ as 

used in § 1082.1(c)(5) of the Interim 

Final Rule. Under that section, the State 

Official must update the information 

provided in the notice if the State 

Official ‘‘intends to file a complaint, 

motion for relief, or similar document 

that is materially different’’ than the 

information initially provided. By way 

of clarification, material changes are 

those changes that substantively affect 

the legal or factual allegations of an 

action. Material changes would include, 

among other things, substantive changes 

in the factual allegations of an action, 

substantive changes in the citation to a 

State Official’s legal authority to bring 

such an action, changes in the number 

of counts charged, changes in legal 

theories relied upon, and adding 

additional parties to an action. This list 

of material changes is not intended to be 

exhaustive, but is representative of the 

types of changes that would trigger a 

supplemental notification requirement 

under § 1082.1(c)(5). The Bureau 

encourages State Officials to consult 

with the Office of Enforcement on a 

case-by-case basis to determine if 

changes to documents filed in an action 

amount to ‘‘material’’ changes, requiring 

further notification. 

Another commenter stated that 

§ 1082.1(c) of the Interim Final Rule is 

inconsistent with section 1042(b) of the 

Dodd-Frank Act because § 1082.1(c) 

permits a State Official to provide a 

complete and unredacted copy of any 

complaint or action initiating document 

‘‘in its form as of the date the notice is 

provided.’’ The commenter stated that 

section 1042 of the Dodd-Frank Act 

requires the State Official to provide the 

complete and ‘‘final’’ complaint at the 

time of initial notification. 

Because § 1082.1(b) of the Interim 

Final Rule requires notification ten days 

in advance of a State Official filing a 

complaint or other action initiating 

document, it is impractical to require 

the State to provide the Bureau with the 

‘‘final’’ version of these documents. To 

the extent the commenter is concerned 

that the notice will be inaccurate, 

§ 1082.1(c)(5) requires supplemental 

notice if there are any material changes 

to the information provided to the 

Bureau in the initial notification 

documents. 

As discussed below, § 1082.1(c) of the 

Interim Final Rule was also amended to 

require State Officials to identify, as part 

of the notification, any limitations the 

State Official requires on the disclosure 

of the substance or fact of the notice to 

any person or entity outside of the 

recipient agency. The Bureau also made 

some minor technical revisions to 

§ 1082.1(c). 

The Bureau adopts § 1082.1(c) of the 

Interim Final Rule with the changes 

discussed above. 

Section 1082.1(d) Bureau Response 

Section 1082.1(d) of the Interim Final 

Rule describes how the Bureau may 

intervene or otherwise participate in an 

action initiated by a State Official. 

Several commenters suggested 

changes to this section of the Interim 

Final Rule. Some commenters 

recommended that the Bureau revise the 

Interim Final Rule to provide clear 

standards for when it would be 

appropriate for the Bureau to exercise 

its power to intervene under § 1082.1(d). 

Further, one commenter suggested that 

the Interim Final Rule should be 

amended to specify under which 

provisions of law the Bureau may 

legally intervene. 

Section 1042(b)(2) of the Dodd-Frank 

Act authorizes the Bureau to intervene 

in any action brought by a State Official 

pursuant to the authority granted to the 

State under section 1042(a) of the DoddFrank Act. The Bureau reserves the right 

to intervene or otherwise participate in 

any action where it lawfully may do so, 

whether under section 1042(b)(2) of the 

Dodd-Frank Act or under another 

provision of law (including the Federal 

Rules of Civil Procedure). As a result, 

the Bureau declines to amend the 

Interim Final Rule as recommended and 

will determine which actions are 

appropriate for intervention on a caseby-case basis. 


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Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 39115 

1Section 1022(b)(2)(A) of the Dodd-Frank Act 

addresses the consideration of the potential benefits 

and costs of regulation to consumers and covered 

persons, including the potential reduction of access 

by consumers to consumer financial products or 

services; the impact on depository institutions and 

credit unions with $10 billion or less in total assets 

as described in section 1026 of the Dodd-Frank Act; 

and the impact on consumers in rural areas. Section 

1022(b)(2)(B) requires that the Bureau ‘‘consult with 

the appropriate prudential regulators or other 

Federal agencies prior to proposing a rule and 

during the comment process regarding consistency 

with prudential, market, or systemic objectives 

administered by such agencies.’’ The manner and 

extent to which these provisions apply to a 

rulemaking of this kind that does not establish 

standards of conduct is unclear and to benefits, 

costs and impacts that are compelled by statutory 

changes rather than discretionary Bureau action is 

unclear. Nevertheless, to inform this rulemaking 

more fully, the Bureau performed the described 

analyses and consultations. 

The Bureau made some minor 

technical revisions to § 1082.1(d). 

The Bureau adopts § 1082.1(d) of the 

Interim Final Rule with the changes 

discussed above. 

Section 1082.1(e) Confidentiality and 

Privilege 

Section 1082.1(e) of the Interim Final 

Rule governs the recipient agencies’ 

treatment of the information provided in 

the notice. The Interim Final Rule 

provides that the substance and fact of 

the notice shall not be disclosed by the 

Bureau or the prudential regulator prior 

to the information becoming public and 

also establishes certain exceptions to 

this requirement. These exceptions 

include (1) disclosures required by law, 

(2) disclosures consented to by the State 

Official, and (3) disclosures made to 

another government entity to protect the 

public interest after consultation with 

the State Official. In addition, the 

Interim Final Rule states that the 

provision of notice shall not be deemed 

a waiver of any applicable privilege. 

One commenter raised two concerns 

with respect to this section. First, the 

commenter stated that the Bureau does 

not have the authority to limit a 

prudential regulator’s ability to disclose 

such information and asserted that 

prudential regulators actually have an 

obligation to alert entities they 

supervise of such a notification. Second, 

the commenter asserted that the Bureau 

has no legal basis for its assertion that 

information provided by State Officials 

pursuant to the notification requirement 

shall not be deemed a waiver of any 

applicable privilege. 

Section 1082.1(e) is promulgated 

pursuant to the Bureau’s exclusive 

authority, under section 1042(c) of the 

Dodd-Frank Act, to prescribe 

regulations implementing the notice 

requirement. That authority necessarily 

includes the power to determine how 

the notice will be provided and how any 

non-public information contained 

therein will be treated by those who 

receive it. The Bureau, however, has 

revised the Interim Final Rule to 

emphasize that the restrictions on 

disclosure emanate from the nature of 

the information as belonging to the 

State. That information, including the 

fact of notice itself, is typically both 

sensitive and confidential. There is 

nothing in the Dodd-Frank Act to 

suggest that Congress intended section 

1042(b) to prevent State Officials from 

keeping the substance and fact of their 

law enforcement actions confidential 

vis-a`-vis third parties. Accordingly, the 

Final Rule amends the Interim Final 

Rule to provide that the substance and 

fact of the notice shall be subject to any 

limitations on disclosure required by 

the State Official pursuant to section 

1082.1(c)(viii), subject to certain 

exceptions. As set forth in section 

1082.1(e) of the Interim Final Rule, 

these exceptions include (1) disclosures 

required by law, (2) disclosures 

consented to by the State Official, and 

(3) disclosures made to another 

government entity to protect the public 

interest after consultation with the State 

Official. 

With respect to the commenter’s 

assertion that prudential regulators 

actually have an obligation to alert 

entities they supervise if they receive 

notification of an action by a State 

Official, the commenter provided no 

support for this assertion nor is the 

Bureau aware of any. 

With respect to the commenter’s 

privilege concerns, the provision of 

notification by a State Official to the 

Bureau pursuant to the Final Rule will 

not constitute a waiver of any applicable 

privilege. The disclosure by State 

Officials of the notification materials 

required by the Final Rule constitutes a 

compelled disclosure to the Bureau of 

information required by law, as opposed 

to a voluntary disclosure or a disclosure 

to an adversary that would constitute a 

waiver of applicable privileges. 

Moreover, the Bureau’s rulemaking 

authority under sections 1022 and 1042 

of the Dodd-Frank Act includes the 

authority to prescribe rules governing 

the implications of compliance with the 

statutory notice mandate. This provision 

furthers that mandate by encouraging 

compliance. 

Finally, other commenters were 

concerned about the disclosure of 

confidential and/or privileged material 

contained in documentation maintained 

by the Bureau, including State 

notification documents provided to the 

Bureau. One commenter expressed 

specific concern regarding maintaining 

confidentiality when sending electronic 

mail to an anonymous address such as 

Enforcement@cfpb.gov. 

Section 1082.1(e) of the Final Rule 

expressly provides that the State Official 

may impose limitations on the 

disclosure of the substance or fact of the 

notice to any entity outside of the 

recipient agency, subject to certain 

exceptions. Further, the Bureau will 

comply with the confidentiality 

procedures promulgated in its Interim 

Final Rule governing the Disclosure of 

Records and Information, 12 CFR 1070, 

to the extent applicable, and any future 

amendments to that Rule. Finally, the 

Bureau notes that its electronic mail 

system, which includes the incoming 

mailbox for Enforcement@cfpb.gov and 

ExecSec@cfpb.gov, is a secured webbased electronic mail system and access 

to these secured accounts is limited to 

select personnel within the Office of 

Enforcement and the Office of the 

Executive Secretary. 

The Bureau adopts § 1082.1(e) of the 

Interim Final Rule with the changes 

discussed above. 

Section 1082.1(f) No Private Right of 

Action or Defense 

Section 1082.1(f) of the Interim Final 

Rule clarifies that § 1082.1 does not 

create any right, benefit, or defense 

which is enforceable against the United 

States or State Officials enforcing Title 

X of the Dodd-Frank Act or any 

regulation prescribed thereunder. 

The Bureau received one comment on 

this section, which stated that to the 

extent the Interim Final Rule sets out 

rights enforceable under the Dodd-Frank 

Act or other statutes, the Interim Final 

Rule cannot remove those rights. Thus, 

the commenter recommended that the 

Bureau delete § 1082.1(f). 

The Bureau adopts § 1082.1(f) of the 

Interim Final Rule without change in 

the Final Rule. By way of clarification, 

§ 1082.1(f) of the Final Rule does not bar 

the exercise of any pre-existing rights; it 

merely makes clear that the Final Rule 

creates no additional rights. 

VI. Section 1022 Analysis 

In developing the Final Rule, the 

Bureau has considered the potential 

benefits, costs, and impacts as required 

by section 1022(b)(2)(A) of the DoddFrank Act.1 In addition, the Bureau has 

consulted or offered to consult with the 

prudential regulators, the Department of 

Housing and Urban Development, the 

Securities and Exchange Commission, 

the Department of Justice, and the 

Federal Trade Commission before and 

after issuing the Interim Final Rule, 

including with regard to consistency 

with any prudential, market, or systemic 


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39116 Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 

objectives administered by such 

agencies. 

The Final Rule implements the DoddFrank Act’s requirement to provide 

notice to the Bureau and prudential 

regulators when a State initiates an 

action under Title X of the Dodd-Frank 

Act or a regulation prescribed 

thereunder. The Final Rule will help 

ensure more efficient and consistent 

implementation of the State notification 

requirement, which will benefit both 

consumers and covered persons. In 

particular, the Final Rule provides that 

the notice shall be subject to any 

limitations on disclosure imposed by 

the State Official subject to certain 

limitations, establishes notification 

deadlines, including an exception for 

emergency proceedings, and specifies 

the content of the notice. 

The Final Rule neither imposes any 

obligations on consumers nor has any 

direct impact on their access to 

consumer financial products or services. 

Further, the Final Rule has no unique 

impact on insured depository 

institutions or insured credit unions 

with less than $10 billion in assets as 

described in section 1026(a) of the 

Dodd-Frank Act. Finally, the Final Rule 

does not have a unique impact on rural 

consumers. 

A commenter stated that the four 

interim final rules that the Bureau 

promulgated together on July 28, 2011 

failed to satisfy the rulemaking 

requirements under section 1022 of the 

Dodd-Frank Act. Specifically, the 

commenter stated that ‘‘the CFPB’s 

analysis of the costs and benefits of its 

rules does not recognize the significant 

costs the CFPB imposes on covered 

persons.’’ The Bureau believes that it 

fully considered the benefits, costs, and 

impacts of the Interim Final Rule 

pursuant to section 1022. Notably, the 

commenter did not identify any specific 

costs to covered persons imposed by the 

State Notification Rule that are not 

discussed in part C of the 

SUPPLEMENTARY INFORMATION to the 

Interim Final Rule. 

VII. Procedural Requirements 

1. Administrative Procedure Act 

One commenter questioned whether 

the Interim Final Rule is exempt from 

the notice-and-comment requirements 

of section 553(b) of the Administrative 

Procedure Act (APA), 5 U.S.C. 553. The 

commenter argued that the Interim Final 

Rule is not properly characterized as 

relating solely to agency organization, 

procedure or practice because it requires 

the submission of information regarding 

covered persons to Federal officials and 

also establishes rules for the treatment 

of such information, which could result 

in potential harm to covered persons. 

The commenter further urged the 

Bureau to seek comment on similar 

rulemakings in the future. 

The notice-and-comment procedures 

described in section 553(b) of the APA 

do not apply to rules of agency 

organization, procedure, or practice, or 

when the agency for good cause finds 

that notice and public comment on the 

rules being promulgated are 

impracticable or unnecessary. Both the 

Interim Final Rule and Final Rule relate 

to agency organization, procedure, or 

practice because they establish 

procedures for State Officials to provide 

notice to the Bureau; the requirement to 

provide the notice itself derives from 

section 1042(b)(1)(A) of the Dodd-Frank 

Act—not the Bureau’s regulations. In 

any event, for the reasons discussed in 

the preamble to the Interim Final Rule, 

the Bureau had good cause for issuing 

the Interim Final Rule without prior 

notice and an opportunity for comment. 

The Bureau nevertheless solicited 

comment on the Interim Final Rule. 

Moreover, because the Final Rule 

merely finalizes the Interim Final Rule, 

to which it is substantially similar, the 

Bureau for good cause finds that 

additional notice and public comment 

on the Final Rule is unnecessary. 

In addition, because the Final Rule 

relates solely to agency procedure and 

practice, it is not subject to the 30-day 

delayed effective date for substantive 

rules under section 553(d) of the 

Administrative Procedure Act, 5 U.S.C. 

551 et seq. Even if this requirement 

applied, the Bureau finds there is good 

cause for the Final Rules to take effect 

immediately upon publication in the 

Federal Register. The Final Rule is 

substantially similar to the Interim Final 

Rule, which became effective on July 29, 

2011. Thus, no purpose would be served 

by delaying the Final Rule’s effective 

date. 

2. Regulatory Flexibility Act 

Because no notice of proposed 

rulemaking was required, the 

requirements of the Regulatory 

Flexibility Act, 5 U.S.C. 601(2), do not 

apply. 

3. Paperwork Reduction Act 

The collection of information 

requirements contained in this Final 

Rule have been approved by the Office 

of Management and Budget (OMB) in 

accordance with the PRA under OMB 

control number 3170–0019. The 

estimated time per response was 30 

minutes. 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. 

List of Subjects in 12 CFR Part 1082 

Banks, Banking, Consumer protection, 

Credit, Credit unions, Federal Reserve 

System, Investigations, Law 

enforcement, National banks, Savings 

associations, State and local 

governments, Trade practices. 

For the reasons set forth in the 

preamble, the Bureau of Consumer 

Financial Protection revises part 1082 to 

Chapter X in Title 12 of the Code of 

Federal Regulations to read as follows: 

PART 1082—STATE OFFICIAL 

NOTIFICATION RULES 

Authority: 12 U.S.C. 5481 et seq. 

§ 1082.1 Procedures for notifying the 

Bureau of Consumer Financial Protection 

when a State Official takes an action to 

enforce Title X of the Dodd-Frank Wall 

Street Reform and Consumer Financial 

Protection Act of 2010. 

(a) Notice requirement. (1) Pursuant to 

12 U.S.C. 5552(b) and except as 

provided in paragraph (b) of this 

section, every State attorney general and 

State regulator (State Official) shall 

provide the notice described in 

paragraph (c) of this section to the 

Office of Enforcement of the Bureau of 

Consumer Financial Protection (the 

Bureau), the office of the Bureau 

responsible for enforcement of Federal 

consumer financial law pursuant to 

Title X of the Dodd-Frank Wall Street 

Reform and Consumer Financial 

Protection Act of 2010, as amended, 

Public Law 111–203 (July 21, 2010), 

codified at 12 U.S.C. 5481 et seq. (the 

Dodd-Frank Act), and the Office of the 

Executive Secretary of the Bureau at 

least ten calendar days prior to initiating 

any action against any covered person. 

For purposes of this section, an action 

requiring notification is any 

adjudicative proceeding before a court 

or an administrative or regulatory body 

to determine whether a violation of any 

provision of Title X of the Dodd-Frank 

Act or any regulation prescribed 

thereunder has occurred. Initiating an 

action under this section would include 

but not be limited to the filing of a 

complaint, motion for relief, or other 

document which initiates an action or a 

proceeding. 

(2) Notice shall be provided to the 

Office of Enforcement and the Office of 

the Executive Secretary, or their 

successor offices, via electronic mail to 

Enforcement@cfpb.gov and 

ExecSec@cfpb.gov. In the event of 

technical problems preventing the 

delivery of notice, the Office of 


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Federal Register / Vol. 77, No. 126 / Friday, June 29, 2012 / Rules and Regulations 39117 

Enforcement or its successor entity 

should be contacted. 

(3) On the same date that notice is 

provided to the Office of Enforcement 

and the Office of the Executive 

Secretary pursuant to paragraph (a)(1) of 

this section, a copy of the notice shall 

be sent to the relevant prudential 

regulator, if any, or the designee thereof, 

by mail or electronic mail. 

(4) Notice shall be deemed to have 

been provided as of the date of 

transmitting or mailing the materials 

described in paragraph (c) of this 

section. 

(5) The Office of Enforcement, or its 

successor entity, in consultation with a 

State Official, may provide, for good 

cause shown, an alternative deadline for 

the notice described in paragraph (a)(1) 

of this section. 

(b) Emergency actions. (1) Pursuant to 

12 U.S.C. 5552(b), in the event that a 

State Official initiates or intends to 

initiate an action and, in order to protect 

the public interest or prevent irreparable 

and imminent harm, is unable to 

provide timely notice as described in 

paragraph (a) of this section, the State 

Official shall provide the notice 

described in paragraph (c) of this 

section as soon as is practicable and not 

later than 48 hours after initiation of the 

action. 

(2) Notice shall be provided in 

accordance with the procedures set 

forth in paragraphs (a)(2) through (4) of 

this section. 

(3) The Office of Enforcement, or its 

successor entity, in consultation with a 

State Official, may provide, for good 

cause shown, an alternative deadline for 

the notice described in paragraph (b)(1) 

of this section. 

(c) Contents of notice. (1) Pursuant to 

12 U.S.C. 5552(b), the notice required 

under paragraphs (a) and (b) of this 

section shall include a written 

description of the anticipated action, 

including: 

(i) The court or body in which the 

action is to be initiated; 

(ii) The identity of the parties to the 

action; 

(iii) The nature of the action to be 

initiated; 

(iv) The anticipated date of initiating 

the action; 

(v) The alleged facts underlying the 

action; 

(vi) A contact name, electronic mail 

address, and phone number of an 

individual involved with the matter in 

the office of the State Official with 

whom the Bureau may consult; 

(vii) A determination as to whether 

there may be a need to coordinate the 

prosecution of the action so as not to 

interfere with any action, including any 

rulemaking, undertaken by the Bureau, 

a prudential regulator, or another 

Federal agency; and 

(viii) A statement by the State Official 

setting forth any limitations on the 

disclosure of the substance or fact of the 

notice to any person or entity outside of 

the recipient agency. 

(2) The notice required under 

paragraphs (a) and (b) of this section 

shall further include a complete and 

unredacted copy of any complaint, 

motion for relief, or similar document 

that is the subject of the notice, in its 

form as of the date the notice is 

provided. To the extent the complaint, 

motion for relief, or similar document 

contains the information described in 

paragraph (c)(1) of this section, 

provision of the complaint, motion for 

relief, or similar document shall be 

deemed sufficient notice of that 

information. 

(3) In the event that notice is provided 

after the initiation of an action, the 

written description shall also include 

the following, in addition to the 

information described in paragraph 

(c)(1) of this section: 

(i) A brief description of any 

proceeding that occurred as a result of 

the initiation of the action, including 

any orders issued by a court or other 

body; 

(ii) Any case number, matter number, 

or designation assigned to the action; 

and 

(iii) Information on scheduled court 

or other administrative or regulatory 

proceedings. 

(4) In the event that notice is provided 

after the initiation of an action, in 

addition to the requirements set forth in 

paragraph (c)(3) of this section, the 

notice shall further include a complete, 

unredacted copy of any document filed 

by any party in relation to the action 

and any orders issued by the court or 

other body. 

(5) If the State Official, after providing 

the notice described in paragraphs (c)(1) 

and (c)(2) of this section, intends to file 

a complaint, motion for relief, or similar 

document that is materially different 

from the document included with the 

notice, the State Official shall provide a 

copy of that document prior to filing, in 

accordance with the method described 

in paragraph (a)(2) of this section. 

(d) Bureau response. In any action 

described in paragraphs (a) and (b) of 

this section, the Bureau may: 

(1) Intervene in the action as a party; 

(2) Upon intervening, 

(i) Remove the action to the 

appropriate United States district court, 

if the action was not originally brought 

there; and 

(ii) Be heard on all matters arising in 

the action; 

(3) Appeal any order or judgment, to 

the same extent as any other party in the 

proceeding may; and 

(4) Otherwise participate in the action 

as appropriate. 

(e) Confidentiality and privilege. (1) 

The information described in paragraph 

(c) of this section, including the 

complaint, motion for relief, or other 

document, as well as the fact that notice 

has been provided, shall be subject to 

any limitations on disclosure imposed 

by the State Official pursuant to 

paragraph (c)(1)(viii) of this section; 

provided, however, that the recipient 

may disclose such information: 

(i) As required by law; 

(ii) When the information is or 

becomes publicly available; 

(iii) With the consent of the State 

Official; or 

(iv) To another State or Federal 

government entity when necessary to 

protect the public interest, after 

consultation with the State Official who 

provided the notice. 

(2) Provision of notice by a State 

Official and disclosure of information 

pursuant to paragraph (e)(1) of this 

section shall not be deemed a waiver of 

any applicable privilege. 

(f) No private right of action or 

defense. The requirements set forth in 

this section are not intended to, do not, 

and may not be relied upon to create 

any right, benefit, or defense, 

substantive or procedural, enforceable at 

law by a party against the United States 

or any State enforcing the provisions of 

the Dodd-Frank Act or any regulation 

prescribed thereunder. 

Dated: June 4, 2012. 

Richard Cordray, 

Director, Bureau of Consumer Financial 

Protection. 

[FR Doc. 2012–14062 Filed 6–28–12; 8:45 am] 

BILLING CODE 4810–AM–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1071 

[Docket No.: CFPB–2012–0020] 

RIN 3170–AA27 

Equal Access to Justice Act 

Implementation Rule 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Interim final rule with request 

for public comment. 

SUMMARY: The Equal Access to Justice 

Act (EAJA or the Act) requires agencies 


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