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Warren, Brown object to CFPB plan to issue formal advisory opinions

Sen. Elizabeth Warren, D-Mass., and Sen. Sherrod Brown, D-Ohio, said a Consumer Financial Protection Bureau policy to issue formal advisory opinions could harm consumers and give companies immunity from consumer protection or anti-discrimination laws.

The senators sent a letter Thursday to CFPB Director Kathy Kraninger stating that while agency guidance may be appropriate in some situations, it should be “broadly applicable to industry,” and not tailored to allow specific companies to skirt laws.

“We have serious concerns that issuing advisory opinions tailored to companies' specific circumstances is not appropriate, especially if companies could use these opinions to circumvent consumer financial laws or as a defense in litigation by the Bureau or other parties,” the letter stated.

CFPB Deputy Director Brian Johnson said in November that the bureau is considering creating a formal advisory opinion process that would allow companies to request an opinion from the agency on the legality of new products and services before they are offered to consumers.

In September, the CFPB unveiled a fintech sandbox framework and a revised policy for sending firms “no action,” letters, which offer a legal safe harbor and relief from supervisory and enforcement actions.

Warren and Brown said in the letter that a formal advisory opinion policy lacked transparency and could give political appointees undue influence over the process.

“The process for requesting or providing guidance should also be transparent, not an opaque process that would conceal companies' efforts to push for interpretations of rules that could weaken critical consumer protections,” the senators said. “In addition, an advisory opinion process should not give political appointees authority to overrule or unduly influence longstanding Bureau policies or practices or the determinations of Bureau career staff.

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