Compliance Blog

Written by Angela Meyster, Regulatory Affairs Counsel

Regulations can be costly, complicated, and troubling.  It can feel like government agencies are out of touch with the effects of their rulemaking and care little about the burdens they impose on you.  Don't you wish you could tell them how you feel, or even change their minds, before they take action?

Well, good news! The nice people in Congress gave you an outlet for your concern…worries…or… outright rage: the Administrative Procedures Act and its Notice and Comment rulemaking process.

As NAFCU regulatory affairs counsel, I rely on this process to voice member concerns and advocate on behalf of the credit union industry on a weekly basis.  But you don’t have to work for a trade association - or even be an attorney - to participate.  Anyone can write a comment letter.

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How the notice and comment process works:

Statutory Authorization. There needs to be a statute that tells an agency to solve a particular set of problems and gives it the power to make the rules to do so. Have you heard of the Dodd-Frank Act?  Too soon?

Notice. Once the agency has identified an approach to meeting its stated goal, and has drawn up proposed rules to do so, it will provide a Notice of Proposed Rulemaking (NPRM).

Note: An agency may publish the NPRM on its website for a significant period of time before actually entering it into the Federal Register.  Think of it as an elaborate Easter egg hunt, where at the end of game you don’t get chocolate but a ton of regulations with which your credit union has to now figure out a way to comply.  Luckily here at NAFCU we have some tips on how to track regulations in the Federal Register.

This is where you come in:  This is your opportunity to digest everything the agency has put out there and formulate an opinion on it.  Usually the agency identifies specific areas on which it would like feedback, but its blanket request for comment “on any other aspect of the proposal” means that you can and should write to them about anything that concerns you about the proposed rule.

Here at NAFCU we quickly translate the convoluted legal jargon the agency has put out into something comprehensible and send it off to our members in the form of “Regulatory Alerts” for their input.  Based on this input, we write a comment letter representing the interests of NAFCU members and send it off to the agency. But we also work with our members if they want to send their own comment letters.  Every time you see a Regulatory Alert is an opportunity to get your voice heard twice.

There is certainly a benefit to voicing your concern through a trade association’s comment letter. It represents the overall sentiment of a large representative population of the industry on an issue, giving it additional clout. It also allows you to voice your opinion indirectly on a potentially delicate issue. If you don't want to make your credit union's view public - all comment letters are public information - providing your input to NAFCU can help get your message across discretely. 

Review. After the comment deadline, the agency must review the comments carefully. Often, if a comment letter contains new data, policy arguments, or hypothetical scenarios the agency did not think of in formulating its proposed regulation, the agency will either revise its proposed rule or elaborate on something that was unclear.  Bottom line: you can make a difference here. 

The Notice and Comment process is a powerful tool for stakeholders and regulators alike, although not every agency has chosen to adhere to the APA…but that’s a blog post for someone else. When it comes down to it, a lot of agencies want to hear what you have to say and it’s important for you to say it.  Many agencies lack the operational knowledge to fully understand the practical results and consequences of their regulations and that’s where the notice and comment process proves its worth.  After the agency finalizes its regulation it is an uphill climb for changes (even Congress struggles with this), so proactive measures in the proposed stages are crucial.

Here are some tips for writing effective comment letters:

• Outline of the letter: include the docket number, an introduction (tell them about yourself and why your opinion matters), and which specific aspects of the proposal on which you are commenting;

• Don’t feel compelled to comment on every aspect of a proposal - if only one part affects you, just comment on that one;

• The most persuasive feedback often includes real-world data and specificity;

• Your comments do not need to be just critical - you should express your support for any portion of the proposal you agree with; and

• Suggest alternatives that both meet the agency’s goals and reduce your compliance costs.

And, of course - provide NAFCU with your feedback on our Regulatory Alerts to help us as we attempt to educate the regulators.