Rescinded CFPB rulemaking procedural rule

Yesterday's notice rescinding the CFPB rulemaking procedural rule references a rarely acknowledged problem in regulatory change monitoring: the distinction between the agency announcement of a rulemaking action and its publication in the Federal Register.

Banking agencies typically announce rulemaking actions on their websites when they are transmitted to the Federal Register, but official publication in the Federal Register can take several weeks. There are important reasons to capture and track both events:

1️⃣ The agency announcement is important because stakeholders in regulated institutions typically want to get notified of actions and start working on related tasks as soon as possible. They will start asking regulatory change management staff and vendors about events that they learned about independently but that failed to show up in their inbox or systems.

2️⃣ The Federal Register notice is important because the publication date has legal significance under the Administrative Procedure Act, and certain key dates (like the effective date of a final rule) are not determined until publication of this notice. The Federal Register version of the notice is also the long-term persistent official record of the event and can be mapped with other rulemaking data entities such as the docket and RIN.

It can be hard enough to manage two events that issue the same document when the relationship between them is consistent across agencies. But the rescinded CFPB rule purported to change this behavior when it comes to CFPB rules, stating that:

"A final Bureau of Consumer Financial Protection (Bureau) rule is deemed issued upon the earlier of the following:
"(a) When the final rule is posted on the Bureau's Web site; or
"(b) When the final rule is published in the Federal Register."

I say "purported" because I don't think this rule was actually followed in setting effective dates in the Federal Register notice, though I'd be happy to be corrected. In any event, yesterday's rescission officially brings the CFPB into line with the general practice in federal administrative rulemaking, explaining that:

"The concern that gave rise to the need to define issuance in this way, namely, the impendency of certain deadlines for rulemaking following the transfer of authorities to the Bureau that were imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), is no longer relevant. The Bureau recognizes the vital role that the Federal Register plays in providing transparency, public notice, and public participation in rulemaking, and therefore is deciding to revert to the traditional mechanism for determining when a rule has been validly promulgated absent specific congressional or regulatory imposition of an alternative date."