Consumer Protection Chief: Efforts to Reach (the Many) People Who Don’t Read the Federal Register Are Working

The Consumer Financial Protection Bureau’s three-year effort to write regulations in plain English and engage average members of the public is paying off, bureau director Richard Cordray told an American Bar Association luncheon on Thursday.

By using 21st-century technology and involving consumers of such everyday products as mortgages and credit reporting, the bureau strives to handle regulations “very differently,” Cordray said, from the decadent Roman Emperor Caligula, who is reported to have “complied with the law requiring publication of his edicts by having them written in very small script and posted on high pillars where they could not be read by anyone.”

The government’s newest agency, which was created amid post-recession controversy under the 2010 Dodd-Frank Financial Reform Act, has been pursuing “heightened transparency through greater participation,” Cordray told several hundred attorneys who specialize in the Administrative Procedure Act, “as a means of helping to square the workings of expert agencies with the principles of democratic government.”

But the practical problem, he noted, is that “on the whole, people do not read the Federal Register. “Unsurprisingly, many comments come from a cottage industry of trade associations, advocates, lobbyists and regulatory lawyers who are fluent in agency processes,” he said. “While such groups play an important role in the vetting of rules, individual citizens and smaller businesses may find it difficult to participate and present their experience and their views. So we have made serious efforts to seek more input from the broader public.”

Last October, the independent agency released “eRegulations,” a Web-based, open-source tool designed to make the provisions of a regulation implementing the Electronic Fund Transfer Act easier to find, read and understand, Cordray noted. Users can “move easily among past, present and future versions of a regulation, and smoothly navigate between regulation text, official interpretations, appendices and section-by-section analyses contained within Federal Register notices.” The positive feedback has led to plans to expand eRegulations.

To encourage comment on proposed rules in mortgage servicing and debt collection, the bureau has also experimented with a “Regulation Room,” a website designed at Cornell University Law School that encourages more public participation by providing “an easy-to-read summary of the main issues or provisions and then allows people to comment, in a relatively informal way,” Cordray said. “A moderator is available to answer questions and, where appropriate, to frame questions to the commenter. ” More than 80 percent of the 8,000 unique visitors offering 900 comments were citizens who had never before commented on a federal rule.

Finally, Cordray touted the heavy public participation in the bureau’s consumer complaint function. When first launched in July 2011, it received 520 complaints; the number this March had ballooned to 20,000 complaints about financial products, student loans, auto loans, credit reporting and credit cards, he noted.

“The patterns formed by more than 300,000 consumer complaints received to date help to underscore the importance of various issues as articulated by consumers themselves,” he said. “This intensive focus on the voice of the consumer is also important as long-term insurance against the possibility of agency capture, to keep us from losing sight of the mission Congress conferred on us.”