Bankers should also recognize that community activists and
competitors (including credit unions) also follow the regulatory
process and write comment letters. Many of these groups have a
vested interest in defending consumers’ rights, so they may not take
into consideration the challenges and unintended consequences
that may result from a rule going forward as proposed.
Three examples demonstrate that comment letters matter:
■ ■ Scot Stetka, compliance director for a major credit card issuer,
recalls his experience with a customer identification program
(CIP) comment letter to the Financial Crimes Enforcement
Network (FinCEN). The proposed definition of a face-to-face
transaction was “very broad,” he says, and “when coupled with
a proposed rule for making copies of identifying documents,”
it would have made some application-taking practices “almost
impossible.” In his comment letter, Stetka provided information
about the impracticality of the rule for flight attendants who
collect credit card applications on airplanes. “I then wrote what
I thought their rule should be, to accomplish what Congress
was requiring, including narrowing the definition of ‘face to
face.’ To my great surprise it appeared they cut and pasted the
words right out of my comment letter and placed them in the
final rule—evidence that a sound, reasonable, well-written
alternative will get their attention.”
■ ■ When she wrote about a proposal related to Reg. O, Meg Sczyrba pointed out that “it was difficult to find comparables
for commercial loans, to document that you were not offering
preferential treatment to insiders, if there was a short time
window, just a few weeks,” Sczyrba, now director of regulatory
compliance at PayPal, remembers. “And they actually changed
the rule! They expanded the time period to several months.
Sometimes the system really does work.”
■ ■ In May 2008, the board proposed regulating overdraft practices under its unfair and deceptive acts and practices (UDAP)
authority. It published a proposal that included checks, ACH
transactions, and debit card overdrafts under Section 5 of the
Federal Trade Commission Act. In addition to filing comments
on behalf of the industry, the ABA supplied an outline of points
for bankers to use in drafting their own comment letters.
Individual bankers responded with specifics. In January 2009,
the board abandoned the UDAP overdraft proposal, instead
proposing to regulate only debit card overdrafts under Reg. E.
Understanding the New Bureau
and Working Effectively With it
The Dodd-Frank Act transfers rule-writing authority for a
lengthy list of consumer protection laws from the Federal Reserve
Board and other federal agencies to the CFPB. It gave the bureau
significant discretion to prescribe such rules “as may be necessary or appropriate” to enable it to administer federal consumer
