Understanding the CFPB Advisory Opinion Program
Learn how the CFPB’s Advisory Opinion Program works, who can use it, and how written guidance can reduce regulatory uncertainty.
The Consumer Financial Protection Bureau (CFPB) operates an Advisory Opinion (AO) Program to give regulated entities and other stakeholders formal, written guidance about how federal consumer financial laws and regulations apply to specific questions. The program is designed to reduce regulatory uncertainty, promote consistent compliance, and make the Bureau’s interpretations available to the broader public.
1. What the Advisory Opinion Program Is and Why It Matters
The Advisory Opinion Program is a process through which the CFPB issues publicly available interpretive rules in response to questions about the meaning of statutes and regulations under its jurisdiction. These opinions are published in the Federal Register and on the CFPB’s website so that all market participants can rely on the same authoritative interpretations.
In practical terms, the program seeks to:
- Clarify ambiguous regulatory requirements before they give rise to costly disputes or enforcement actions.
- Support proactive compliance planning by supervised institutions, service providers, and other covered persons.
- Promote consistent enforcement of federal consumer financial law across markets and products.
- Enhance transparency by making interpretive guidance available to the public, not just to the requesting party.
Because advisory opinions are issued as interpretive rules under the Administrative Procedure Act, entities that act in good faith reliance on an opinion can obtain certain protections, particularly where statutes or regulations expressly recognize reliance on official interpretations.
2. Relationship to the CFPB’s Statutory Objectives
The Advisory Opinion Program is one of the tools the CFPB uses to achieve its statutory purposes: ensuring that consumers have access to fair, transparent, and competitive markets for financial products and services. When choosing which questions to address through advisory opinions, the Bureau looks at how potential guidance will advance those objectives.
In evaluating topics, the CFPB places emphasis on whether resolving an interpretive question would:
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- Provide clear, timely information that helps consumers make informed decisions.
- Identify and address outdated or unduly burdensome requirements that may impede innovation or efficient operations.
- Promote consistent treatment of similar conduct across entities and supervisory jurisdictions.
- Improve the functioning of markets for consumer financial products and services, including access and competition.
3. Who Can Request an Advisory Opinion?
The program is open to a broad range of potential requestors. Under the CFPB’s Advisory Opinions Policy, the following parties can typically submit a request:
- Individual entities subject to CFPB jurisdiction, such as banks, credit unions, nonbank lenders, servicers, and debt collectors.
- Trade associations representing multiple member institutions.
- Law firms or compliance consultants submitting on behalf of a client or group of clients.
- Other stakeholders with a legitimate interest in understanding how a rule applies to a contemplated course of conduct.
Third parties may submit on behalf of a client without publicly identifying that client in the published opinion, which allows institutions to seek clarity without necessarily disclosing proprietary business plans.
4. What Types of Questions the Program Addresses
The CFPB generally limits advisory opinions to questions that can be resolved through an interpretive rule rather than a change in underlying policy or legal standards. In other words, the Bureau uses the program to explain how existing law applies, not to create new substantive obligations.
Issues well-suited for an advisory opinion often have these characteristics:
- They involve ambiguities in existing regulations under the CFPB’s purview.
- They concern recurring fact patterns that have surfaced in examinations or supervision.
- They raise questions of substantive importance with significant potential impact on consumers or industry practices.
- They have not been fully addressed in prior regulations, official interpretations, or other authoritative guidance.
Conversely, the CFPB is unlikely to issue an advisory opinion on topics that are already subject to active rulemaking, enforcement actions, or clear precedent.
5. How the CFPB Selects Requests for Advisory Opinions
Because the Bureau cannot respond to every question, it uses selection criteria to determine which requests will be addressed through an advisory opinion. The Advisory Opinions Policy identifies both primary and secondary factors for this prioritization.
5.1 Primary factors the Bureau considers
An issue is more likely to be addressed through an advisory opinion if:
- It has been flagged during examinations or supervisory work as an area where additional clarity could improve compliance.
- It is of significant importance for consumers or regulated entities, with broad market implications.
- It involves a genuine regulatory gray area that the CFPB has not previously explained through interpretive rules, official commentary, or other authoritative channels.
5.2 Situations that weigh against issuing an opinion
The Bureau presumes that an advisory opinion is generally not appropriate when:
- The issue is the subject of an ongoing investigation or enforcement action by the CFPB or another regulator.
- The topic is already being addressed in an ongoing or planned rulemaking that will provide more comprehensive guidance.
- The question is better suited for notice-and-comment rulemaking because it would require changes to the regulatory framework rather than interpretation.
- The issue could be handled more effectively through a compliance aid or standard regulatory inquiry response.
- Existing Bureau or court precedent already clearly answers the question.
5.3 Secondary considerations
When multiple potential topics satisfy the primary criteria, the Bureau also considers additional factors, such as:
- How well the potential opinion aligns with the CFPB’s statutory objectives.
- The estimated consumer benefit from clarifying the issue.
- How the interpretation might influence the actions of other regulators overseeing similar institutions.
- The resource implications for the CFPB in researching, drafting, and publishing the opinion.
6. How to Submit a Request for an Advisory Opinion
Requests for advisory opinions must follow the CFPB’s specified content and submission requirements. The Bureau accepts requests by email and reviews them on a rolling basis.
While specific formatting instructions are set by the CFPB, a well-structured request typically includes the following elements:
- Identification of the requestor (or the represented entity), including contact details and a description of the business.
- A concise statement of the legal question or interpretive issue to be addressed.
- A description of the relevant facts or proposed course of conduct, including any assumptions the requestor is making.
- Citations to the specific statutory and regulatory provisions implicated.
- Any known prior authority (such as regulations, guidance, or case law) and an explanation of why uncertainty remains.
- A discussion of the potential consumer impact and compliance implications if the issue is clarified.
The CFPB expects the request to address an actual or reasonably contemplated scenario rather than hypothetical or purely academic questions. This allows the Bureau to ground its interpretations in concrete facts.
7. Publication and Effect of Advisory Opinions
Once the CFPB issues an advisory opinion, it is published in two principal locations:
- The Federal Register, where interpretive rules and policy statements are formally recorded.
- The CFPB’s public website, typically organized by topic or underlying statute (such as the Fair Credit Reporting Act or Truth in Lending Act).
These opinions function as interpretive rules under the Administrative Procedure Act, clarifying how the Bureau understands and will apply existing statutory and regulatory provisions. Under Appendix C to Regulation F (implementing the Fair Debt Collection Practices Act), actions taken in good faith in conformity with advisory opinions referenced in that appendix receive specific statutory protection.
8. Examples of Topics Addressed Through Advisory Opinions
Over time, the CFPB has issued advisory opinions on a range of consumer finance topics. While each opinion is fact-specific, they collectively illustrate the types of questions the program is designed to address.[10]
| General Area | Example Focus | Illustrative Issues Clarified |
|---|---|---|
| Fair Credit Reporting | Background screening, permissible purposes, and accuracy of data.[10] | When consumer reporting agencies or users of reports have a permissible purpose, and how they must address facially false data. |
| Debt Collection | Regulation F coverage and limitations. | How time-barred debts and certain fee practices, such as “pay-to-pay” fees, are treated under the Fair Debt Collection Practices Act and Regulation F. |
| Mortgage and Real Estate | Digital comparison tools and related payments under RESPA. | Whether and when payments to operators of online mortgage-shopping platforms constitute prohibited referral fees. |
| Credit Products | Applicability of Truth in Lending rules. | Whether particular arrangements, such as certain earned wage access or contract-for-deed home financing structures, involve “credit” subject to Regulation Z. |
| Special-Purpose Programs | Special purpose credit programs. | What research and written plans are needed for programs designed to expand credit access to specified classes of people under Regulation B. |
These examples demonstrate that advisory opinions can be highly technical, often involving careful parsing of regulatory text and its application to evolving business models.[10]
9. Practical Benefits for Compliance and Risk Management
For compliance officers, legal counsel, and risk managers, the Advisory Opinion Program offers several concrete advantages:
- Reduced uncertainty: When the Bureau has spoken clearly on a question, internal stakeholders can align policies and procedures accordingly.
- Better product design: Fintech firms and financial institutions can structure new offerings with a clearer sense of how rules will be applied.
- Improved examination readiness: Institutions that rely on advisory opinions can document that reliance and incorporate it into policies and training.
- Level playing field: Publicly available opinions help ensure that similarly situated entities are held to consistent standards.
However, advisory opinions do not eliminate all regulatory risk. Entities still must ensure their actual practices match the factual assumptions in the opinion and must consider how other federal or state regulators may interpret overlapping requirements.
10. Best Practices for Entities Considering a Request
Before deciding to submit an advisory opinion request, organizations should evaluate whether that path is the most effective way to obtain clarity. The following best practices can help:
- Review existing authority: Examine the relevant regulations, official interpretations, prior guidance, and case law to confirm that a genuine ambiguity remains.
- Assess alternative channels: In some cases, informal regulatory inquiries, industry outreach, or participation in rulemaking may be more appropriate.
- Coordinate internally: Involve legal, compliance, product, and senior management to ensure the request accurately reflects the institution’s business plans.
- Define the question narrowly: Focus on a clear, answerable interpretive question, supported by carefully described facts.
- Plan for public disclosure: Assume that the resulting advisory opinion will be publicly accessible and may influence the broader market.
11. Frequently Asked Questions (FAQs)
Q1: Does an advisory opinion apply only to the requestor?
Advisory opinions are written in response to a specific request and based on particular facts, but they are published so that other entities can understand how the CFPB interprets the law in comparable circumstances. Other parties may generally rely on the reasoning, provided their own facts are materially similar and they remain attentive to any subsequent legal developments.
Q2: Are advisory opinions legally binding?
Advisory opinions are interpretive rules, which means they express how the CFPB understands and will enforce existing statutes and regulations. They do not change the underlying law, but they can carry significant weight in supervision and enforcement, and some statutes grant explicit protection to entities acting in conformity with such opinions.
Q3: Can the CFPB issue an advisory opinion on its own initiative?
Yes. The Bureau may choose topics and issue advisory opinions without a formal external request if it identifies areas where clarification would materially aid compliance or consumer protection.
Q4: How does the Advisory Opinion Program differ from rulemaking?
Rulemaking generally involves notice-and-comment procedures and can create or revise substantive obligations. Advisory opinions, by contrast, interpret existing provisions to resolve specific questions of meaning or application. The Bureau will typically reserve rulemaking for issues that require broader policy decisions or changes to regulatory text.
Q5: Where can I find existing advisory opinions?
The CFPB maintains a public list of advisory opinions, organized by topic and statute, on its website and in the Federal Register. Reviewing existing opinions is a crucial first step before deciding whether to submit a new request.
References
- Advisory Opinion Program — Consumer Financial Protection Bureau. 2024-10-01 (page last modified date may vary). https://www.consumerfinance.gov/compliance/advisory-opinion-program/
- Consumer Financial Protection Bureau Finalizes Advisory Opinions Policy and Announces Two New Advisory Opinions — Consumer Financial Protection Bureau Newsroom. 2020-11-30. https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-finalizes-advisory-opinions-policy-and-announces-two-new-advisory-opinions/
- Advisory Opinions Policy — Federal Register, 85 FR 77987. 2020-12-03. https://www.federalregister.gov/documents/2020/12/03/2020-26661/advisory-opinions-policy
- CFPB Finalizes Advisory Opinions Policy and Issues Two Advisory Opinions — Ballard Spahr, Consumer Finance Monitor. 2020-12-03. https://www.consumerfinancemonitor.com/2020/12/03/cfpb-finalizes-advisory-opinions-policy-and-issues-two-new-advisory-opinions/
- Appendix C to Part 1006 — Issuance of Advisory Opinions — Consumer Financial Protection Bureau (Regulation F). 2020-10-30 (effective date; subsequent technical amendments may apply). https://www.consumerfinance.gov/rules-policy/regulations/1006/C/
- Advisory Opinion on Special Purpose Credit Programs — Consumer Financial Protection Bureau. 2020-12-21. https://www.consumerfinance.gov/rules-policy/final-rules/advisory-opinion-on-special-purpose-credit-programs/
- Advisory Opinion on Fair Credit Reporting; Facially False Data — Consumer Financial Protection Bureau. 2022-10-20. https://www.consumerfinance.gov/rules-policy/final-rules/advisory-opinion-on-fair-credit-reporting-facially-false-data/
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