WASHINGTON—As many as 100 policy statements, interpretive rules, advisory opinions and other guidance that had been issued by the Consumer Financial Protection Bureau (CFPB) could be rescinded, according to Russell Vought, the acting director of the CFPB who is also the director of the Office of Management and Budget.

The reason, according to Vought: those rules were enacted in violation of the law.

As the CU Daily has reported, Vought and the Trump administration have sought to largely eliminate the CFPB with most of its staff let go and its headquarters building all but shuttered. 

“For too long this agency has engaged in weaponized practices that treat legal restrictions on its authorities as barriers to be overcome rather than laws that we are oath-bound to respect,” Vought wrote in an internal memo, according to Fox Business, which said it had reviewed the document. “This weaponization occurs with particular force in the context of the Bureau’s use of sub-regulatory ‘guidance.’ The use of guidance to regulate is unlawful and deprives the public of fair notice of what conduct is prohibited. The Bureau will no longer engage in this practice. Effective immediately, Bureau components may not issue guidance  that purport to create rights or obligations binding on persons or entities outside the Bureau.”

‘Not Enough’

Fox Business further reported that Vought went on to add in the memo that “it is not enough to simply stop regulation through guidance prospectively” and that the Bureau “must rescind all ‘guidance’ that has unlawfully regulated private parties in the past. To that end, the Bureau is conducting a comprehensive internal review of guidance documents to ensure that the Bureau is not imposing rights or obligations through guidance.”

Vought alleged much of the rulemaking coming out of the CFPB has been in violation of the notice-and-comment process prescribed by the Administrative Procedure Act.”

Must Be ‘Nonbinding’

Vought said guidance issued by the CFPB has to make it clear it’s nonbinding and refrain from including mandatory language unless it’s repeating a statutory or regulatory obligation, imposing obligations beyond the terms of laws and regulations or failing to specify that non-compliance won’t result in enforcement actions, according to Fox Business. 

He added the CFPB will start a 14-day process of reviewing all previously issued guidance to rescind guidance that does not comply with the agency’s requirements, which could involve up to 100 such rules.