Trial Disclosure Program Proposals

Billing Code: 4810-AM-P
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Chapter X
Policy to Encourage Trial Disclosure Programs; Information Collection
[Docket No. CFPB-2012-0046]
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice of policy.
SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is issuing its Policy to
Encourage Trial Disclosure Programs (Policy), which is intended to carry out the Bureau’s
authority under subsection 1032(e) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (Dodd-Frank Act).
DATES: The Policy will be effective from the date of official publication in the Federal
Register.
FOR FURTHER INFORMATION CONTACT: For additional information about the Policy,
contact Will Wade-Gery, Division of Research, Markets and Regulations, Consumer Financial
Protection Bureau, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I.

Overview
In subsection 1032(e) of the Dodd-Frank Act, 12 U.S.C. 5532(e), Congress gave the

Bureau authority to provide certain legal protections to companies to conduct trial disclosure
programs. This authority can be used to help further the Bureau’s statutory objective, stated in
subsection 1021(b)(5) of the Dodd-Frank Act, to “facilitate access and innovation” in the

1

“markets for consumer financial products and services.” 1
In line with this authority, the Bureau is publishing the Policy that is laid out in full in the
final section of this Notice. Under its terms, if the Bureau approves a specific trial disclosure
program, then, for the duration of an agreed testing period, the Bureau will exempt the approved
company’s trial disclosure from—or will deem it to be in compliance with—applicable federal
disclosure requirements, to the extent that it is used in accordance with the specific terms and
conditions approved by the Bureau. The Bureau believes that there may be significant
opportunities to enhance consumer protection by facilitating innovation in financial products and
services and enabling companies to research informative, cost-effective disclosures. The Bureau
also recognizes that in-market testing, involving companies and consumers in real world
situations, may offer useful information with which to improve disclosure rules and model
forms.
II.

Overview of Public Comments
On December 17, 2012, the Bureau published a notice inviting the general public and

other Federal agencies to comment on any aspect of its proposed Policy to Encourage Trial
Disclosure Programs (Proposed Policy). 2 The Bureau received eighteen formal comments on the
Proposed Policy. Industry trade associations and other industry groups submitted nine comment
letters. Financial services providers submitted three comment letters. There were three
comment letters from consumer groups. Individuals also submitted a further three comments.
All commenters supported the stated goals of the Proposed Policy. Most comments
asked for clarification or further detail around specific parts of the Proposed Policy. Some urged

1

12 U.S.C. 5511(b)(5).
2

changes to the Proposed Policy either to create more incentives for the regulated community to
participate in trial disclosure programs or to provide for additional consumer protections in
approved tests. One comment opposed implementation of the Proposed Policy, at least in its
current form; this commenter also disputed the Bureau’s legal authority for certain aspects of the
Proposed Policy.
III.

Summary of Comments, Bureau Response, and Resulting Policy Changes
This section provides a summary of the comments received by subject matter. It also

summarizes the Bureau’s assessment of the comments by subject matter and, where applicable,
describes the resulting changes that the Bureau is making in the final Policy. With some specific
exceptions, the Bureau has not made changes to the substance of the Policy. In response to
certain comments, however, it has revised the Policy to provide additional clarity and elaboration
around a number of specific points.
A.

Legal Authority

As noted in the Proposed Policy, subsection 1032(e) of the Dodd-Frank Act gives the
Bureau authority to permit trial programs that are designed to “improve upon” existing
disclosures. One consumer group contended that the Proposed Policy exceeds the Bureau’s legal
authority in two respects: (1) by not requiring trial disclosure programs to meet the criteria for
model forms prescribed by the Bureau under subsection 1032(b) of the Dodd-Frank Act, 12
U.S.C. 5532(b); and (2) by potentially permitting trial disclosure programs that are designed to
test cost savings alone. The Bureau believes both contentions lack legal merit.
Subsection 1032(b)(1) authorizes the Bureau to issue model forms that “may be used at

2

77 FR 74625 (Dec. 17, 2012).
3

the option of a covered person” when the Bureau uses its authority under Section 1132 to
require disclosures to ensure that the costs, risks, and benefits of particular consumer financial
products and services are adequately disclosed both initially and over the term of the product or
service. Subsection 1032(b)(2) sets forth three “minimum” features concerning format and
language that such model forms must possess. These provisions do not limit the trial disclosures
that the Bureau may approve under subsection 1032(e). In that provision, Congress gave the
Bureau authority to permit testing of disclosures that violate disclosure requirements imposed
directly on covered persons under subsection 1032(a) or other sources of federal consumer
financial law. From the face of the stature, therefore, there is no reason to think that Congress
intended the Bureau’s authority under subsection 1032(e) to be circumscribed by subsection
1032(b). As a matter of policy, however, to the extent a proposal includes revised disclosures,
the Bureau believes those should meet the stated 1032(b)(2) criteria of plain language, clear
format and design, and succinctness. 3 The Policy has been revised to make that point.
The Bureau also sees no legal or policy reason to eliminate cost-effectiveness as a
sufficient criterion for an “improved” disclosure. In the Bureau’s view, a trial disclosure that is
intended to maintain the same level of consumer understanding but in a more cost effective
manner counts as an improved disclosure. Under the Policy, however, the Bureau will not
approve any trial disclosure that it believes will weaken consumer understanding of useful
information that is the focus of a regulatory or statutory obligation. That outcome is not one that
the Policy is intended to enable, and the Bureau has revised the Policy to make that clear.

3

A proposal to change a delivery mechanism, as opposed to the substantive content of a
disclosure, would not track against the criteria for a model form.
4

B.

Approval Process

Most comments concerned the approval process for trial disclosure programs. Comments
focused on the areas identified below.
1.

Cost-Sharing

Several trade associations and financial services companies questioned whether, in light
of the costs involved in designing and implementing trial disclosure programs, companies will
have sufficient incentive to propose trial disclosure programs under the Policy. For the most
part, however, these commenters did not urge more streamlined application or participation
procedures. Instead, they requested a clear indication from the Bureau that several covered
persons—potentially facilitated by a trade organization—may properly spread the costs of
participation among themselves, thereby improving the incentive to participate. Some trade
associations noted that absent such collaboration, industry participants would lack the resources
to conduct a trial program.
The Bureau would welcome collaboration and cost-sharing, and it has clarified the final
Policy to this effect. To help ensure adequate protection for consumers, however, the Bureau
must know the identity of each specific in-market tester before approving that entity’s
participation. As a result, the Bureau will not give final approval to any proposed trial disclosure
unless the entities involved are specifically identified. At the same time, however, the Bureau
sees no reason why a single trial disclosure program may not properly be proposed and
implemented by more than one covered person. In fact, as both industry and consumer
commenters noted, multi-party tests may offer more robust and reliable results. By the same
token, the Policy should not be read to prevent a trade association—or indeed any other entity,

5

including non-profit groups or third-party vendors—from helping to facilitate cost-spreading.
In addition, the Policy does not rule out the possibility of the Bureau conditionally
approving a particular disclosure for testing without at that point requiring the specific identity of
all participants. In this kind of staggered approval arrangement, there would be a follow-on
process for specific testers to secure approval to use the disclosure. But even if the Bureau were
to stage approval in this manner, the Policy would still not permit a particular tester to claim the
benefit of a waiver unless the Bureau ultimately approves it by name as a test participant.
2.

Development Costs

Citing the costs of developing a proposal and implementing a trial disclosure program,
several commenters urged the Bureau to permit covered persons to contact the Bureau to discuss
a proposal before they submit complete proposals. This initial contact could help companies
avoid the costs of developing proposals that are unlikely to meet with the Bureau’s approval for
one or more reasons (for example, because the Bureau is close to approving a duplicative
proposal). The Policy is not intended to limit this kind of initial contact. The present Policy is
one component part of the Bureau’s Project Catalyst initiative, which invites companies to bring
innovation-related concerns to the Bureau’s attention at [email protected]. Disclosure
innovators, therefore, may use that point of contact to request a preliminary discussion of a
potential trial disclosure proposal.
3.

Iterative Testing

Several commenters, including industry and consumer group commenters, suggested that
the Policy accommodate iterative testing of disclosures. The Bureau acknowledges that in some
cases, iterative testing, using relatively small test populations, may help refine and improve

6

disclosure concepts. Instead of a single, larger test, of a preset disclosure, this kind of approach
involves a sequence of smaller tests that enable ongoing improvements to a test disclosure
concept. Both forms of testing may serve well in different contexts, and the Bureau intends for
the Policy to support both approaches.
In cases where iterative testing is appropriate, therefore, the Bureau will follow a
staggered approach to waiver approval. At an initial stage, an iterative proposal should follow
all the normal terms of the Policy, with the exception that it may not include all forms of the
disclosure to be tested, to the extent that these are unknown at the point of initial submission.
Any such proposal should explain why iterative testing is the more effective means of
proceeding with respect to the particular disclosure. If the Bureau approves the program, an
initial waiver will then cover the first test disclosure, and the Bureau will commit in the Terms
and Conditions document 4 governing that waiver to consider later iterations of the test disclosure
for follow-on waivers on a defined fast-track basis. The Policy thereby enables iterative testing,
where it is appropriate, while also ensuring that each tested disclosure is specifically authorized.
4.

Additional Safeguards

Notice and Comment
Several consumer groups asked that the Policy require that all proposed disclosures be
subject to full notice and comment. In contrast, a financial service provider cautioned that such a
procedure would discourage companies from proposing trial disclosure programs because it
would add considerable time and expense to the process. In the Bureau’s assessment, requiring
notice and comment for each proposed disclosure would conflict with Congress’s instruction to

4

See Section C of the Policy.
7

issue standards and procedures “designed to encourage covered persons to conduct trial
disclosure programs.” 5 The Bureau believes that it is highly unlikely that covered persons would
be willing to subject proposals to full notice and comment, not least because of the extended time
period involved. In addition, a test disclosure does not represent a proposed Bureau rule. Test
results could help the Bureau to put forward proposed rule changes, at which point full notice
and comment would be required.
Other Safeguards
Consumer groups also proposed that tests be approved only when there is no statutory
liability associated with the disclosure process. In addition, they proposed that no in-market tests
proceed until after the industry tester(s) carried out “lab-based” qualitative testing of each
proposed disclosure.
The Bureau does not agree that tests should be limited to disclosures for which noncompliance carries no statutory liability. Subsection 1032(e) authorizes the Bureau to apply a
time-limited safe harbor with respect to disclosure requirements under “a rule or an enumerated
consumer law.” 6 It does not limit this authority to statutes (or rules) that impose no liability. In
addition, while statutory liability may well indicate that a disclosure is intended to prevent severe
consumer harm, as the commenters reasonably contend, that does not argue against testing for
disclosure improvement. The more important the role of disclosure in preventing harm, the more
important it is to improve disclosures as much as possible.
The Bureau agrees with commenters that “lab-based” qualitative testing will often be a
useful means of showing that a disclosure is worth testing through larger-scale, quantitative in-

5

12 U.S.C. 5532(e)(2).
8

market testing. That is not a compelling reason, however, to make such testing an absolute
requirement for approval. The approval process calls for reasonable grounds to expect the
proposed disclosures to represent an improvement. In many cases, those grounds will consist—
at least in part—of “lab-based” qualitative test results. But that need not always be the case.
Other grounds could supply a sufficient basis for expecting improved outcomes. Similar
disclosures may have been used and shown to be effective for related consumer financial
products, or prior research may offer reasonable grounds to believe the proposed disclosure will
be an improvement.
4.

Guidance on Bureau Disclosure Priorities

Some commenters asked the Bureau to identity priority areas for potential tests. The
Bureau does not rule out taking this step at some point in the future. In considering ways to
improve disclosure policy, the Bureau may in the future identify one or more areas as
particularly appropriate for testing.
C.

Legal Protection

1.

Waiver Scope

Several trade associations and industry participants asked the Bureau to clarify the scope
of the safe harbor that will be provided to approved participants. In particular, they asked
whether the waivers would shield participants from (i) private litigation by consumers and (ii)
enforcement or other proceedings by other regulators.
The Bureau recognizes that subsection 1032(e) will not provide the incentive to test new
disclosures that Congress intended unless the scope of any approved waivers is clear. Entities

6

12 U.S.C. 5532(e)(2); see also n.20 infra.
9

that the Bureau approves for a waiver—so long as their conduct accords with the terms of
approval—should not face private liability exposure for violating those provisions of a federal
disclosure statute or rule that the Bureau identifies as being within the scope of the waiver.
Because such a waiver deems the trial disclosure to be in compliance with or exempts it from the
provisions identified by the Bureau, there is no basis under those provisions for a private suit
based on the company’s use of the disclosure. The same rationale applies to other federal and
state regulators even if they have enforcement or supervisory authority as to the “enumerated
consumer laws” for which the Bureau has rulemaking authority. When a Bureau-issued waiver
is in effect with respect to such a statutory or regulatory disclosure requirement, there is no
predicate for an enforcement or supervisory action by such a regulator that is both: (1) based on
statutory or regulatory provisions within the scope of that waiver, and (2) against a company
with an approved program in compliance with the waiver’s terms.
It is true that other federal regulators may, in certain circumstances, issue rules that
overlap with the Bureau’s rules. 7 When considering a waiver, therefore, the Bureau will confer,
as appropriate, with other federal regulators. Similarly, although the Bureau lacks authority to
waive state disclosure requirements, the Bureau will endeavor to work with state regulators, as
appropriate, to secure their support for a particular trial disclosure program. The Bureau also
encourages participants to confer with other federal and state regulators where a proposed
disclosure implicates requirements administered by such regulators. In addition, submissions

7

See, e.g., 12 U.S.C. 5581(b)(5))(D) (requiring the Bureau and the Federal Trade Commission to
negotiate an agreement with respect to rulemaking by each agency, in light of the overlap
between the Bureau’s rulemaking authority under Section 1031 of the Dodd-Frank Act, 12
U.S.C. 5531, and the Federal Trade Commission’s rulemaking authority under section
18(a)(1)B) of the Federal Trade Commission Act).
10

may properly indicate whether other regulators have indicated support or opposition to the
proposal.
2.

Affirmative Bureau Statements

Finally, several commenters asked the Bureau to state that disclosures approved under the
Policy are not deceptive. The Bureau does not intend to approve test disclosures that it considers
deceptive. As a result, the Bureau anticipates being able to make this kind of statement when it
publishes notice of a waiver. Any such Bureau statement, however, would be provisional.
Unless and until otherwise indicated, the Bureau’s statement would apply only to disclosures that
an approved party made under the terms of that particular approved trial disclosure program.
3.

Waiver Revocation

The Proposed Policy specified that if the Bureau decides to revoke or partially revoke a
waiver for failure to follow the waiver’s terms, it (i) will do so in writing, specifying the reason
or reasons for its action; and (ii) may offer an opportunity to correct any such failure before
revoking a waiver. Several commenters found these procedural protections insufficient and
requested that they be enhanced in various ways.
The Bureau acknowledges that entities may reasonably request some opportunity to
dispute grounds for a potential revocation. Before determining to issue a revocation, therefore,
the Bureau will notify the company of its grounds for its potential revocation, and permit the
company an opportunity to respond, consistent with the terms of this Policy. The Policy has
been clarified to this effect.
D.

Public Disclosure

Commenters raised two public disclosure concerns.

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1.

Consumer Awareness of Tests

Citing protocols for conducting research on human subjects, consumer groups urged that
consumers be given the chance to opt out of test participation. They also requested that test
disclosures be clearly identified as such. One industry submission suggested that the Bureau
inform consumers after the fact of their participation in a test.
Although an opt-in process for trial participation would serve to protect certain consumer
interests, the Bureau does not expect the trial disclosure program to work as Congress intended if
the Policy required test disclosures to be identified as such at the time of delivery. As one
commenter observed, disclosures only work to the extent consumers read them. A critical test of
any disclosure’s effectiveness, therefore, is whether consumers decide to read it in any given
case. As a result, if consumers are told that a disclosure is for a test, it may no longer be possible
to test for the most basic and controlling component of disclosure effectiveness. In the Bureau’s
assessment, therefore, a categorical policy requiring consumer notice and consent for trial
disclosure programs would tend to undermine the purpose of subsection 1032(e). Such a
categorical policy would also be in tension with Congress’s recognition in subsection 1032(e)
that public disclosure of programs may appropriately be limited in order to encourage the
conduct of “effective” tests.
The Bureau has considered requiring companies to alert consumers that they are in a test
population—regardless of whether the consumers are in a control group or in the group to
receive a test disclosure. 8 This type of notification, potentially supplemented by an opt-out

8

Indirect notice that consumers may receive a test disclosure will already be provided by the
Bureau’s website publication of approved test disclosures. See Section D of the Policy.
12

option, would create equivalency between the two groups. At the same time, however, it would
limit effective testing in many cases. All consumers would be alerted to the fact of disclosure
testing, and their conduct upon receiving disclosures would likely change as a result.
In the Bureau’s assessment, the benefit of this direct notice, weighed against the cost of
preventing effective testing and associated disclosure improvements, does not warrant a
categorical policy requiring direct disclosure of testing to test populations. To the extent that
companies can find ways to provide notice or an opt-out option that do not risk the effectiveness
of potential tests, however, the Bureau encourages them to do so. Furthermore, to mitigate
privacy risks to consumers, the Bureau is clarifying the Policy to state that the Bureau does not
intend to seek or obtain any personally identifiable financial information of consumers in test
results that are shared with the Bureau.
2.

Disclosure of Test Results

Several consumer groups urged that all test results be made public. After careful
consideration, the Bureau has decided not to revise the Proposed Policy to this effect. Congress
has directed that public disclosure be limited as necessary to encourage covered persons to
conduct effective tests. 9 In the Bureau’s assessment, requiring testing companies to commit, a
priori, to complete public disclosure of test results may unproductively discourage valuable
potential programs that stand to benefit consumers. Some of the information provided to the
Bureau may comprise trade secrets or other confidential business information. Testing
companies will ultimately need to permit public use of test results if those results are to enable
regulatory change. In addition, the Policy specifies that one of the factors that the Bureau will

9

See 12 U.S.C. 5532(e)(3).
13

consider in deciding which applications to approve is the extent to which the company intends to
permit public disclosure of test results. Incentives to public disclosure, therefore, are built into
the nature and structure of the program. Particularly against that background, additional
categorical rules could reduce the incentive to propose potentially valuable trial disclosure
programs. Moreover, the absence of a categorical rule does not preclude the Bureau from
seeking a particular level of disclosure in connection with any particular proposal.
F.

Other Considerations

Commenters also requested clarification on a number of discrete issues.
1.

Delivery Form

The Bureau confirms that disclosure improvements may properly consist of revised forms
of delivery, not simply changes to the content of disclosures. This was already covered at
footnote 7 of the Proposed Policy. It is now reflected in the eligibility criteria listed in Section A
of the final Policy.
2.

Electronic Submission

Submissions for approval can be made via electronic means. Submitters can use the
Project Catalyst email address. The Policy has been revised accordingly.
3.

Bureau Monitoring of Consumer Harm

Several consumer groups requested that the Bureau monitor tests for potential harm to
consumers. The Proposed Policy already called for proposals to include plans to mitigate any
harm identified. To further address the concern raised, however, the Bureau has amended the
eligibility criteria listed in Section A of the Policy to include both an identification of any risks
of consumer harm that may be associated with the proposed program and a description of how

14

the program mitigates any such risks.
IV.

Final Policy
The text of the final Policy is as follows.
Consumers need timely and understandable information to make the financial decisions

that they believe are best for themselves and their families. Much federal consumer protection
law, therefore, rests on the assumption that accurate and effective disclosures will help
Americans understand the costs, benefits, and risks of different consumer financial products and
services. In Section 1032 of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act), Congress gave the Consumer Financial Protection Bureau (Bureau) authority
to develop rules to ensure that consumers receive such disclosures, as well as model forms to
help companies comply with those rules. 10
In subsection 1032(e) of the Dodd-Frank Act, Congress also gave the Bureau authority to
approve “trial disclosure programs.” 11 This authority can be used to help further the Bureau’s
statutory objective, stated in subsection 1021(b)(5) of the Dodd-Frank Act, to “facilitate access
and innovation” in the “markets for consumer financial products and services.” In particular,
Congress empowered the Bureau to provide a legal “safe harbor” to companies testing revised
disclosures. For disclosure trials it approves, therefore, the Bureau will, for a defined period,
“deem” a participating company “to be in compliance with” or “exempt” it from identified
federal disclosure requirements. 12 The Bureau believes that there may be significant

10

See 12 U.S.C. 5532(a)-(d).
12 U.S.C. 5532(e).
12
12 U.S.C. 5532(e)(2). For convenience, this statutory authority to deem companies in
compliance with or to exempt them from disclosure requirements – in each case for a limited
11

15

opportunities to enhance consumer protection by facilitating innovation in financial products and
services through enabling responsible companies to research informative, cost-effective
disclosures in test programs. So long as appropriate consumer protections are in place, the
Bureau also recognizes that “in-market” testing, involving companies and consumers in real
world situations, may offer useful information with which to improve disclosure rules and model
forms.
Accordingly, the Bureau is issuing its Policy on trial disclosure programs. 13 Our intent is
for the Policy to encourage banks, thrifts, credit unions, and other financial services companies
to innovate by proposing and conducting such programs, consistent with the protections for
consumers that are described in this Policy. 14 The information that companies generate by such
programs may then help the Bureau to establish more effective disclosure rules and practices. 15
The Policy has four sections:
•

Section A describes which proposed programs will be considered eligible for a temporary
waiver;

period of time – is hereinafter referred to as the authority to issue “waivers” for approved
programs.
13
The Bureau may permit a covered person or covered persons to conduct a trial disclosure
program “subject to specified standards and procedures.” 12 U.S.C. 5532(e)(1).
14
The Policy is not intended to nor should it be construed to: (1) restrict or limit in any way the
CFPB’s discretion in exercising its authorities; (2) constitute an interpretation of law; or (3)
create or confer upon any covered person (including one who is the subject of CFPB supervisory,
investigation or enforcement activity) or consumer, any substantive or procedural rights or
defenses that are enforceable in any manner. Of course, if the Bureau approves a waiver in
connection with a trial disclosure program, the terms of its approval will specify certain legal
rights granted to the recipient or recipients of the waiver with respect to that program. Those
rights, however, are based on the approval notice, and not on the present policy guidance.
15
The Policy should not be viewed as substituting for the normal process of rulemaking. In the
event that information learned from trial disclosure programs triggers or otherwise informs
16

•

Section B lists factors the Bureau will consider in deciding which eligible programs to
approve for such a waiver;

•

Section C describes the Bureau’s procedures for issuing waivers; and

•

Section D describes how we will disclose information about these programs.

Paperwork Reduction Act
According to the Paperwork Reduction Act of 1995, an agency may not conduct or
sponsor, and a person is not required to respond to a collection of information unless it displays a
valid OMB control number. The information that should be submitted to demonstrate eligibility,
as described further in Section A below, has been deemed to be a collection of information for
these purposes. The OMB control number for this collection is 3170-XXXX. It expires on
MM/DD/YYYY. The time required to complete this information collection is estimated to
average between 2 and 10 hours per response, including the time for reviewing any instructions,
searching existing data sources, gathering and maintaining the data needed, and completing and
reviewing the collection of information. The obligation to respond to this collection of
information is required to obtain a benefit to the extent that the information is to establish
eligibility for a temporary waiver, as described in this Policy. Comments regarding this
collection of information, including the estimated response time, suggestions for improving the
usefulness of the information, or suggestions for reducing the burden to respond to this collection
should be submitted to the Bureau at: the Consumer Financial Protection Bureau (Attention:
PRA Office), 1700 G Street NW, Washington, DC 20552, or by email to
[email protected].

follow-on rulemaking, the Bureau would follow the standard rulemaking process, which affords
17

A.

Eligibility
To be considered eligible for a waiver, a proposal should:
1.

Identify the testing company or companies; 16

2.

Describe the new disclosures or delivery methods that are to be tested; 17

3.

Describe how these changes are expected to improve upon existing disclosures, 18
particularly with respect to consumer use, consumer understanding, and/or costeffectiveness; 19

the public the opportunity of submitting comments on a proposed regulation.
16
The Bureau will accept proposals that involve testing by more than one company. Each
testing company must be approved by name and must be a signatory to specific waiver terms, as
described further in Section C below. Although not every testing company need be identified in
an initial application, no company can test subject to a waiver unless and until it has obtained—
and become a signatory to—specific Bureau approval to test a given disclosure. The Bureau will
not provide that approval unless it is satisfied, in its sole discretion, that a company has met all
eligibility requirements for approval and should be approved for the applicable testing program
under the terms of this Policy.
17
So long as otherwise consistent with the minimum eligibility standards, a proposal could
include modifications to an existing model form or other disclosures, changed delivery
mechanisms, replacement of a model form or existing disclosure requirements with new
disclosures or forms, and/or the elimination of select disclosure requirements. All proposals
should include a copy of the trial disclosures to be tested, a description of what they would
replace, and a clear statement of how they would be provided to consumers. When proposals
consist of revised disclosure content—as opposed to revised or streamlined delivery
mechanisms—that content should be in plain language, reflect a clear format and design, and
succinctly explain the information being communicated.
If a proposal is for iterative testing, it should include copies of all forms of the disclosure
that are known at the time of initial submission. It should explain why iterative testing is the
more effective means of proceeding with respect to the particular disclosure concept. In
addition, it should include a proposal for a streamlined approval process for different iterations
of the disclosure. Again, no disclosure can be subject to a waiver under subsection 1032(e)
unless the specific tester has been approved to test that specific disclosure.
18
The relevant existing disclosures are those made in accordance with disclosure rules issued
either under the authority of Section 1032 or to implement an enumerated statute. See 12 U.S.C.
5532(e)(1).
19
Trial disclosures should be “designed to improve upon” existing disclosures. 12 U.S.C.
5532(e)(1). Intended improvements may go to consumer use and understanding of the relevant
18

4.

Provide a reasonable basis for expecting these improvements, and metrics for
testing whether such improvements are realized;

5.

Identify the duration of the test and the size, location, and nature of the consumer
population involved in the test, and explain why that duration and scope are
reasonably necessary for sound testing;

6.

Identify any risks of consumer harm that may be associated with the proposed
program, describe how the program mitigates such risks, and explain the testing
procedures that will be used to assess for potential consumer harm during the
course of the test;

7.

Identify with particularity which provisions of current rules or enumerated
consumer laws are to be temporarily waived in connection with the trial
disclosure program; 20

8.

Identify any third-party vendors to be used in connection with the proposed
program and describe their proposed role;

product or service and/or to the cost-effectiveness of disclosures. The Bureau anticipates
approving trial disclosure programs that are intended to improve both consumer use and
understanding, and cost-effectiveness. Although the Bureau considers cost-effectiveness an
appropriate metric of disclosure improvement, it will not approve a trial disclosure that it
believes will weaken consumer understanding of useful information that is the focus of a
regulatory or statutory obligation, no matter the cost savings expected.
20
Under subsection 1032(e)(2), the Bureau has authority to waive “a requirement of a rule or an
enumerated consumer law,” as that term is defined in the Dodd-Frank Act. See 12 U.S.C.
5481(12); 12 U.S.C. 5481 (notes). As used in subsection 1032(e)(2), the term “rule” includes:
(i) rules implementing an enumerated consumer law; and (ii) rules implementing the Consumer
Financial Protection Act of 2010, including rules promulgated by the Bureau under its authority
to prevent unfair, abusive, or deceptive acts or practices, or to enable full, accurate and effective
disclosure.
19

9.

Contain a commitment to and schedule for sharing test result data 21 with the
Bureau; 22

10.

Acknowledge that the Bureau may revoke any approved waiver if the program
violates the terms and conditions under which the Bureau approves the program;
and

11.

Explain how the testing company will address disclosure requirements for the test
population at the conclusion of the test period.

All proposals should be submitted via email to [email protected]. 23 Submitted
proposals may be withdrawn at any time.

B.

Approval of Proposals for Waivers
To decide whether to approve a proposed program for a waiver, the Bureau will consider

a variety of factors, including:
1.

The extent to which the program may help the Bureau develop disclosure rules or
policies that better enable consumers to understand the costs, benefits, and risks
associated with consumer financial products or services;

21

The Bureau will not seek any test result data that include consumers’ personally identifiable
financial information.
22
The proposal should commit to sharing test result data with the Bureau within a reasonable
period following the end of the program. In addition, it should contain either (1) a commitment
to sharing with the Bureau interim data on test results during the course of the program, or (2) an
explanation for why such interim data cannot reasonably be provided.
23
The email subject line should begin “Trial Disclosure Program.” The present Policy is one
component part of the Bureau’s Project Catalyst initiative, which invites companies to bring
innovation-related concerns to the Bureau’s attention at [email protected]. Disclosure
innovators may use the same Project Catalyst point of contact to request a preliminary discussion
20

2.

The extent to which the program may help the Bureau develop more costeffective disclosure rules or policies;

3.

The extent to which the program anticipates, controls for, and mitigates risks to
consumers; 24

4.

The strength and record of the company’s compliance management system
relative to the size, nature, and complexity of the company’s consumer business;

5.

How effectively and efficiently the program will test for potential improvements
to consumer use, consumer understanding and/or the cost-effectiveness of
disclosures, and how narrowly the program is tailored to the testing objectives;

6.

The extent to which existing data or other evidence indicate that the proposed
changes will realize the intended improvements; and

7.

The extent to which the company intends to permit public disclosure of test
results.

In reviewing and approving applications, the Bureau will also take into consideration the
scope and nature of programs currently underway as well as the Bureau’s available resources.
The decision whether to approve a proposed program for a waiver will be within the Bureau’s
sole discretion. 25 There is no maximum time period of review. In addition, a lack of notice from
the Bureau will not constitute approval of a waiver request.

of a potential trial disclosure proposal. There are no formal submission requirements to request
such a preliminary discussion.
24
This includes the extent to which a proposal contains reasonable contingency plans for
addressing unanticipated consumer harms that arise during the duration of the test.
21

C.

Waiver Procedures for Approved Programs
When the Bureau approves a waiver, it will provide the company or companies that

receive the waiver with the specific terms and conditions of its approval. 26 Waivers will require
companies to certify, and document or otherwise demonstrate to the Bureau, their compliance
with these approved terms and conditions. If a company does not follow the terms and
conditions of the waiver, the Bureau may revoke the waiver in whole or in part. 27
Waiver terms and conditions will be in writing in an integrated document entitled
“1032(e) Trial Disclosure Waiver: Terms and Conditions.” This document will be signed by the
Director of the Bureau or by his or her designee, and by an officer of each company approved for
a waiver in connection with the program.
In addition, the document will:
1.

Identify the company or companies that are receiving a waiver;

2.

Specify the new disclosure(s) or delivery method(s) to be used by that company
or companies under the terms of the waiver;

3.

Specify the provisions of the rule(s) and enumerated consumer law(s) that the
Bureau will waive during the test period for the testing company or companies;

4.

Specify the temporary duration of the waiver;

25

The Bureau will review reasonable requests to reconsider its position on programs for which it
has not approved a waiver.
26
If the Bureau determines not to approve a proposed trial program, it will inform the company
of its determination.
27
Before determining to issue a revocation, the Bureau will notify the affected company (or
companies) of the grounds for revocation, and permit an opportunity to respond. If the Bureau
nonetheless determines that the company failed to follow the terms of the waiver, it may offer an
opportunity to correct any such failure before revoking the waiver. If the Bureau revokes or
22

5.

Describe and delineate the test population(s); and

6.

Specify any other conditions on the effectiveness of the waiver, such as the terms
of testing, data sharing, certification of compliance with the terms of the waiver,
and/or public disclosure.

D.

Bureau Disclosure of Information Regarding Trial Programs
The Bureau will publish notice on its website of any trial disclosure program that it

approves for a waiver. The notice will: (i) identify the company or companies conducting the
trial disclosure program; (ii) summarize the changed disclosures to be used, their intended
purpose, and the duration of their intended use; (iii) summarize the scope of the waiver and the
Bureau’s reasons for granting it; and (iv) state that the waiver only applies to the testing
company or companies in accordance with the approved terms of use.
Public disclosure of any other information regarding trial programs is governed by the
Bureau’s Rule on Disclosure of Records and Information. 28 For example, the rule requires the
Bureau to make available records requested by the public unless they are subject to a FOIA
exemption or exclusion. 29 To the extent the Bureau wishes to disclose information regarding
trial programs to an extent not required by the Rule, the terms of such disclosure will be included
in the 1032(e) Trial Disclosure Waiver: Terms and Conditions document. Consistent with
applicable law and its own rules, the Bureau will not seek to disclose any test data that would
conflict with consumers’ privacy interests.

partially revokes a waiver for failure to follow the waiver’s terms, it will do so in writing and it
will specify the reason or reasons for its action.
28
See 12 CFR 1070 et seq.
23

Dated: _____, 2013.

__________________________________
Leandra English,
Deputy Chief of Staff, Bureau of Consumer Financial Protection.

29

See 12 CFR 1070.14.
24