October 9, Re: Agency Information Collection Activities: Comment Request, Docket No. CFPB ; OMB Control No.

Transcription

1 Mr. Ashwin Vasan Chief Information Officer Consumer Financial Protection Bureau 1700 G Street NW Washington, DC Re: Agency Information Collection Activities: Comment Request, Docket No. CFPB ; OMB Control No XXXX Dear Mr. Vasan: These comments are submitted on behalf of the U.S. Chamber of Commerce Center for Capital Markets Competitiveness ( CCMC ). The U.S. Chamber of Commerce (the Chamber ) is the world s largest business federation, representing the interests of more than three million companies of every size, sector, and region. The Chamber created CCMC to promote a modern and effective regulatory structure for capital markets to fully function in a 21 st century economy. CCMC appreciates the opportunity to submit this letter in connection with the generic information collection (the Generic Collection Proposal ) proposed by the Consumer Financial Protection Bureau (the Bureau ). 1 We applaud efforts to ground the Bureau s work in appropriate data. We also believe that data collection proposals should be transparent and encourage public participation. The Generic Collection Proposal fails those tests. The proposed covered data collections would be similar in form in that each would involve controlled trials in field and economic laboratory settings. Beyond that, however, what data collections the Bureau actually would pursue is unclear. Therefore, the covered data collections appears to be 1 The Federal Register notice, see 79 Fed. Reg (Sep. 9, 2014), provides only an outline of the Generic Collection Proposal. Accordingly, citations to the Generic Collection Proposal herein refer to Parts A and B of the Supporting Statement published in Docket CFPB

2 Page 2 overbroad, imposes significant burdens on respondents, raises privacy concerns, and frustrates the requirements and intent of the Paperwork Reduction Act. The Paperwork Reduction Act relies on public comment and review by the Office of Management and Budget ( OMB ) to protect Americans from undue burdens and to ensure that regulatory agencies receive high-quality information. The recent Government Accountability Office (GAO) report on the Bureau s data collection activities regrettably makes clear that the Bureau has not taken those statutory protections seriously. 2 As will be explained in greater detail below, the Bureau has denied the public notice of and opportunity to comment on its data collection activities, including through an agreement with the Office of the Comptroller of the Currency that had the effect of sidestepping the statute. We respectfully request that the Bureau take steps necessary to create procedures to solicit and receive public comment on its information gathering efforts. We accordingly recommend that the Bureau replace the Generic Collection Proposal with proposals for individual data collections. Alternatively, the Bureau should issue a series of well-defined and clearly limited generic collection proposals that permit informed comment as required by statute. * * * * * The Paperwork Reduction Act generally requires an agency planning to collect information from ten or more people to solicit public comment before securing OMB approval. 3 This notice and comment requirement does not apply to an individual collection if the agency has received prior OMB approval, after notice and comment, of a relevant generic information collection request. As the head of the Office of Information and Regulatory Affairs (OIRA) 4 explained in 2010: A generic [information collection request] is a request for OMB approval of a plan for conducting more than one information collection using very similar methods when (1) the need for and the overall practical 2 I am writing separately to Director Cordray to describe, in light of the GAO report, my concerns relating to the Bureau s data collections. This letter does not discuss those broader concerns. 3 See generally 44 U.S.C et seq. 4 OIRA is an office within OMB and performs substantial elements of OMB s responsibilities under the Paperwork Reduction Act. See 5 C.F.R

3 Page 3 utility of the data collection can be evaluated in advance, as part of the review of the proposed plan, but (2) the agency cannot determine the details of the specific individual collections until a later time.... An agency might, for example, have a general plan to gather views from the public through a series of customer satisfaction surveys in which the agency asks the public about certain agency activities. As part of this plan, the agency would construct, distribute, and analyze the surveys in a similar manner, and the agency would customize each survey. Because the agency sought public comment on the plan, it would not need to seek public comment on each specific information collection that falls within the plan. Instead, agencies need only obtain OMB approval for the specific information collection after a typically brief period of review, subject to the terms of the generic clearance developed during prior OMB review. 5 This is the touchstone for evaluating a generic information collection request: a generic collection is appropriate if the proposal has given notice of the content of the future individual information collections, rendering unnecessary subsequent notice and comment for each covered collection. As described above, for example, a generic information request would be proper if the notice details a customer satisfaction survey that will be given in a number of versions in the future. In that example, as in the others provided by OIRA, 6 the component individual collections will be very similar and only will be subject to being customize[d]. Notice and comment on such customize[d] collections would be unnecessary because the initial notice and comment period provided the public a meaningful opportunity to evaluat[e] in advance and comment upon the entire series of covered collections. In contrast, the Bureau s Generic Collection Proposal does not allow evaluat[ion] in advance of the data collections it covers. The Bureau has not 5 Cass R. Sunstein, Memorandum for the Heads of Executive Departments and Agencies, and Independent Regulatory Agencies, Re. Paperwork Reduction Act Generic Clearances at 2 (May 28, 2010), available at See also Cass R. Sunstein, Memorandum for the Heads of Executive Departments and Agencies, and Independent Regulatory Agencies, Re. Information Collection under the Paperwork Reduction Act (April 7, 2010), available at 6 See Sunstein May 2010 Memorandum at 5 ( Appendix: Sample Generic Clearances ).

4 Page 4 proposed a series of very similar collections. Instead, the Bureau seeks approval for field or laboratory trials on any subject within the Bureau s interest, for any purpose within the Bureau s authority, and with respect to information of any degree of personal sensitivity for consumers. Rather than provide clear notice of what data collections it actually will perform, the Bureau repeatedly offers only uncertainty. For example: The Bureau states the topics that the Bureau is interested in studying so broadly as to cover consumers perspectives on all matters within the Bureau s jurisdiction, 7 and only offers the limitation that [t]hese topics will usually be in the context of consumer financial product markets. 8 (Given that this proposal comes from the Consumer Financial Protection Bureau, we are unsure what other context might be implicated.) Likewise, any question left unanswered by academic research apparently would be fair game for an information collection under this proposal. 9 The Bureau indicates that some, but not all, of the covered collections would collect direct identifying personally identifiable information. 10 The covered collections thus would raise widely varying privacy concerns. Relatedly, the Generic Collection Proposal notes that some of the data collected would be covered by the Bureau s June 30, 2014 Privacy Impact Assessment. In contrast, different data collected in the future would be covered by other Privacy Impact Assessments, including some that will be published by the CFPB in the future, 11 presumably because of the different privacy issues raised by different covered collections. The Bureau does not detail how covered information collections would inform its policymaking efforts and specifically disclaims any connection 7 Generic Collection Proposal Part A at 2 (identifying four general topics of interest to the Bureau, including consumer experiences and potential risks to consumers, including traditionally underserved consumers ). 8 Id. at 3. 9 Id. ( The specific purpose of this generic clearance is to allow the Bureau to better inform and advance scientific understanding of consumer credit markets and household finance. ); Id. at 5 ( The Bureau will conduct controlled trials in field and economic laboratory settings to answer questions that have not yet been satisfactorily addressed in the relevant research literature. ). 10 Id. at Id. at 3 n.3.

5 Page 5 between the covered collections and particular regulatory projects. 12 The universe of possible topics for these data collections thus is not limited to the Bureau s ongoing regulatory work, rendering their scope and benefits yet more uncertain. The Bureau describes timelier monitoring of market developments as a benefit of its proposal. However, it does not identify the markets at issue or explain how the data in question would be timelier than monthly data gathered from credit card issuers, or information from other sources. 13 The Bureau asserts that the burden on the public would be limited by restricting collections to instances in which sufficient data do not already exist. 14 The public cannot assess this assertion, however, since the Bureau does not identify the data it believes does not exist. The Bureau gives the Office of Research and a program of data collections it envisions, as an example of how information may be collected if the request is approved. 15 The Bureau does not specify what this means, however, or explain if and how other offices within the Bureau would benefit from the covered data collections. Moreover, the Bureau indicates that different research will be handled differently, with some closely guarded to protect confidentiality, 16 and other research made available publicly as appropriate. 17 The Bureau indicates that any consumer financial products or delivery mechanisms, including the most novel, could be subjects of its study. It 12 Id. at 3-4 ( The purpose of research conducted under the expected clearance will not be making particular regulatory decisions or developing or evaluating specific policies. Studies conducted under this generic approval may identify opportunities for enhanced or improved regulatory or other policy actions; however, as noted, the Bureau will not initiate any policy changes based solely on these research projects. ). The Bureau is wrong if it reads the Paperwork Reduction Act as not requiring notice and comment whenever an agency burdens the public only out of general curiosity. 13 Id. at 3. See also Government Accountability Office, Consumer Financial Protection Bureau: Some Privacy and Security Procedures for Data Collections Should Continue Being Enhanced (Sep. 2014) (detailing other data collections by the Bureau, including those performed monthly). 14 Generic Collection Proposal at Id. at Id. at Id. at 5-6.

6 Page 6 hypothesizes for example, that the covered data collections may be the best way to explore how consumers would behave in transactions environments that are just emerging and therefore novel. 18 The Bureau does not provide any support for this particular speculation or explain why the developers of such novel and unidentified transactions environments do not deserve an opportunity to weigh in on a Bureau study of consumers of their products. The Bureau does not provide any persuasive explanation why a generic approval is necessary or why the Bureau cannot achieve its goals while otherwise preserving the public s ability to comment on its data collection activities in an informed manner. The Bureau does not explain how, with such an undefined plan for information collection, the burden estimates 11,400 hours to 8,700 people annually are anything more than guesswork. 19 In sum, the Generic Collection Proposal leaves enormous uncertainty about the data collections that the Bureau actually would pursue if approved. Instead, it ultimately only reveals that the Bureau plans to gather primary data from purposive samples through controlled trials in field and economic laboratory settings. 20 The Bureau, in other words, is seeking approval for an entire means of information collection. But the repeated use of the same type of tool in different contexts does not make collections very similar in a way that justifies eliminating future notice and comment. Surely the Bureau would not be granted generic clearance to perform any and all surveys. Likewise, this request for a generic clearance is too broad and too vague. It does not allow the public to give informed comment on the burdens and benefits of the covered collections, and is therefore inadequate under the Paperwork Reduction Act. * * * * * The Generic Collection Proposal, if approved, would exempt significant and currently unidentified information collections from notice and public comment. 18 Id. at Id. at 12-13; 79 Fed. Reg. at See, e.g., Generic Collection Proposal at 1, 2, 3.

7 Page 7 The Bureau has not explained why such a step is necessary or appropriate, particularly in light of the different subjects, burdens, privacy concerns, and purposes of the information collections that the proposal would cover. Given its stated commitment to transparency and public engagement, as well as the requirements of the Paperwork Reduction Act, the Bureau should proceed with individual proposals for the covered information collections. Alternatively, the Bureau should issue a series of detailed generic collection proposals that cover clearly defined and easily understood categories of very similar collections. Sincerely, Jess Sharp Managing Director Center for Capital Markets Competitiveness U.S. Chamber of Commerce cc: The Honorable Shaun Donovan, Director, Office of Management and Budget