CFPB Finalizes Trial Disclosure Policy

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On October 3, the CFPB finalized the trial disclosure policy proposed in December 2012 as part of Project Catalyst, which allows companies to apply for a waiver to test potential disclosure improvements on a trial basis.  The Bureau did not make substantive changes to the final policy but clarified certain aspects based on the public comments.

Most comments to the proposed policy concerned the approval process for trial disclosure programs.  First, the Bureau clarified that it would welcome collaboration and cost-sharing among participants, so long as all entities involved are specifically identified.  Second, the Bureau clarified that potential participants may use ProjectCatalyst@cfpb.gov as a point of contact to request a preliminary discussion of a potential trial disclosure prior to submitting an application.  Third, the Bureau clarified that the policy is intended to accommodate iterative testing of disclosures and that, in cases where subsequent iterations are appropriate, it will follow a staggered approach to waiver approval.

In response to requests for clarification on the scope of the safe harbor provision, the Bureau clarified that entities approved for a waiver will generally be shielded from private litigation under federal law by consumers and generally from enforcement proceedings by other federal regulators, so long as their conduct accords with the terms of approval.  The Bureau will work to coordinate with state regulators.  Entities will be given an opportunity to dispute a potential revocation of a waiver before it is issued.

The Bureau declined requests by consumer groups to subject proposed disclosures to full notice and comment, to make qualitative testing an absolute requirement for test approval, to provide consumers notice and the chance to opt out of testing, and to make test results public.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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