(a) Authority. The regulation in this part is issued by the Consumer Financial Protection Bureau (CFPB) pursuant to the Consumer Financial Protection Act of 2010 (CFPA), Public Law 111-203, tit. X, 124 Stat. 1955.

(b) Purpose. This part implements the provisions of section 1033 of the CFPA, in part, by utilizing industry standards developed by standard-setting bodies recognized by the CFPB.

(c) Organization. This part is organized as follows:

(1) Subpart A establishes the authority, purpose, organization, and definitions applicable to this part, and is reserved for other purposes.

(2) Subpart B is reserved.

(3) Subpart C is reserved.

(4) Subpart D is reserved.

(5) Appendix A provides instructions for how a standard-setting body would apply for CFPB recognition.

For purposes of this part, the following definitions apply:

Consensus standard means a standard that is adopted by a recognized standard setter and that continues to be maintained by that recognized standard setter.

Recognized standard setter means a standard-setting body that has been recognized by the CFPB under § 1033.141.

(a) Recognition of a standard-setting body. A standard-setting body may request CFPB recognition. Recognition will last up to five years, absent revocation. The CFPB will not recognize a standard-setting body unless it demonstrates that it satisfies the following attributes:

(1) Openness: The sources, procedures, and processes used are open to all interested parties, including: consumer and other public interest groups with expertise in consumer protection, financial services, community development, fair lending, and civil rights; authorized third parties; data providers; data recipients; data aggregators and other providers of services to authorized third parties; and relevant trade associations. Parties can meaningfully participate in standards development on a non-discriminatory basis.

(2) Balance: The decision-making power is balanced across all interested parties, including consumer and other public interest groups, and is reflected at all levels of the standard-setting body. There is meaningful representation for large and small commercial entities within these categories. No single interest or set of interests dominates decision-making. Achieving balance requires recognition that, even when a participant may play multiple roles, such as data provider and authorized third party, the weight of that participant's commercial concerns may align primarily with one set of interests. The ownership of participants is considered in achieving balance.

(3) Due process and appeals: The standard-setting body uses documented and publicly available policies and procedures, and it provides adequate notice of meetings and standards development, sufficient time to review drafts and prepare views and objections, access to views and objections of other participants, and a fair and impartial process for resolving conflicting views. An appeals process is available for the impartial handling of procedural appeals.

(4) Consensus: Standards development proceeds by consensus, which is defined as general agreement, though not necessarily unanimity. During the development of consensus, comments and objections are considered using fair, impartial, open, and transparent processes.

(5) Transparency: Procedures or processes for participating in standards development and for developing standards are transparent to participants and publicly available.