PART 9401—SUPPLEMENTAL STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES OF THE BUREAU OF CONSUMER FINANCIAL PROTECTION Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in Government Act of 1978); E.O. 12674, 54 FR 15159 (April 12, 1989); 3 CFR, 1898 Comp., p.215, as modified by E.O. 12731, 55 FR 42547 (October 17, 1990); 3 CFR, 1990 Comp., p. 306; 5 CFR 2635.105, 2635.403, 2635.502 and 2635.803. Source: 77 FR 25019, Apr. 27, 2012, unless otherwise noted. § 9401.101 General. (a) Purpose. (b) Other regulations, guidance and procedures. § 9401.102 Definitions. For purposes of this part: CFPB Ethics Regulations Control Credit Dependent child (1) Unmarried, under the age of 21, and living in the employee's household; or (2) Claimed as a “dependent” on the employee's income tax return. Designated Agency Ethics Official (DAEO) Director Domestic partner (1) Has a close and committed personal relationship and both parties are at least 18 years of age, are each other's sole domestic partner and intend to remain in the relationship indefinitely, and neither is married to, in a civil union with, or partnered with any other spouse or domestic partner; (2) Is not related by blood in a manner that would bar marriage under the laws of the jurisdiction in which the employee resides; (3) Is in a financially interdependent relationship in which both agree to be responsible for each other's common welfare and share in financial obligations; and (4) Has shared for at least six months the same regular and permanent residence in a committed relationship and both parties intend to do so indefinitely, or would maintain a common residence but for an assignment abroad or other employment-related, financial, or similar obstacle. Employee Entity supervised by the Bureau Indebted indebtedness Indebted to an entity OGE Standards Participate Particular matter Particular matter involving specific parties Person Practice of law (1) Preparing any legal document, including any deeds, mortgages, assignments, discharges, leases, trust instruments, or any other instruments intended to affect interests in real or personal property, wills, codicils, instruments intended to affect the disposition of property of decedents' estates, other instruments intended to affect or secure legal rights, and contracts except routine agreements incidental to a regular course of business; (2) Preparing or expressing legal opinions; (3) Appearing or acting as an attorney in any tribunal; (4) Preparing any claims, demands or pleadings of any kind, or any written documents containing legal argument or interpretation of law, for filing in any court, administrative agency, or other tribunal; (5) Providing advice or counsel as to how any of the activities described in paragraphs (1) through (4) of this definition might be done, or whether they were done, in accordance with applicable law; or (6) Furnishing an attorney or attorneys, or other persons, to render the services described in paragraphs (1) through (5) of this definition. Security Special Government employee Spouse (1) The employee and the employee's spouse are separated; (2) The employee and the employee's spouse live apart; (3) There is an intention to end the marriage or separate permanently; and (4) The employee has no control over the separated spouse's securities. Vested legal or beneficial interest [82 FR 35883, Aug. 2, 2017] § 9401.103 Prior approval for outside employment. (a) General requirement. (b) Definition of employment. Note to § 9401.103( b Both 18 U.S.C. 203(d) and 205(e) require special approval for certain representational activities in claims against and other matters affecting the interests of the Government. Thus, an employee who wishes to act as agent or attorney for or otherwise represent his or her parents, spouse, child, or a person for whom or for an estate for which he or she is serving as guardian, executor, administrator, trustee, or other personal fiduciary in such matters as described in those statutes shall obtain the approval of the Government official responsible for the employee's appointment in addition to the regulatory approval required in this section. (c) Standard for approval. (d) Renewed request for approval. (e) DAEO responsibilities. § 9401.104 Additional rules concerning outside employment for covered employees. (a) Prohibited outside employment with an entity supervised by the Bureau. (b) Use of professional licenses related to real estate. (c) Definition of covered employee. (1) An employee in the Division of Supervision, Enforcement, and Fair Lending; (2) An employee serving in an attorney position; (3) An employee in the Office of Research, serving as a section chief at Bureau pay band 71 or above or as a senior economist in the Compliance Analytics and Policy Section; (4) An employee serving in the Office of Consumer Response in an investigations position; (5) An employee required to file a Public Financial Disclosure Report (OGE Form 278e) under 5 CFR part 2634; or (6) Any other Bureau employee specified in a Bureau order or directive whose duties and responsibilities, as determined by the DAEO, require application of the prohibition on outside employment contained in this section to ensure public confidence that the Bureau's programs are conducted impartially and objectively. [82 FR 35885, Aug. 2, 2017] § 9401.105 Additional rules concerning outside employment for Bureau attorneys. (a) Prohibited outside practice of law. (1) Take a position that is or appears to be in conflict with the interests of the Bureau; or (2) Interpret any statute, regulation, or rule administered or issued by the Bureau. (b) Exemption for self representation. (1) In those matters in which the attorney has participated personally and substantially as a Government employee; or (2) In those matters which are the subject of the attorney's official responsibility. [77 FR 25019, Apr. 27, 2012, as amended at 82 FR 35885, Aug. 2, 2017] § 9401.106 Prohibited financial interests. (a) Prohibited interests. (1) An entity supervised by the Bureau; or (2) A collective investment fund that has a stated policy of concentrating its investments in the financial services or banking industry. A collective investment fund includes, without limitation, mutual funds, unit investment trusts (UITs), exchange traded funds (ETFs), real estate investment trusts (REITs), and limited partnerships. (b) Exceptions. (1) Collective investment funds. (i) The fund does not have a stated policy of concentrating its investments in the financial services or banking industry; and (ii) Neither the employee nor the employee's spouse or minor child exercises or has the ability to exercise control over or selection of the financial interests held by the fund. (2) Diversified employee benefit plans. (i) The employee plan does not have a stated policy of concentrating its investments in any industry, business, single country other than the United States, or bonds of a single State within the United States; (ii) The investments of the employee plan are administered by an independent trustee; (iii) The employee plan's trustee has a written policy of varying the plan investments; (iv) Neither the employee nor the employee's spouse or minor child participates in the selection of the employee plan's investments or designates specific plan investments (except for directing that contributions be divided among several different categories of investments, such as stocks, bonds, or mutual funds, which are available to plan participants); and (v) The employee plan is not a profit-sharing or stock bonus plan. (3) Federal retirement and thrift savings plans. (4) State pension plans. (c) Reporting and divestiture of prohibited interests New employees. (2) Newly prohibited interest. (3) Interests acquired without specific intent. (d) Disqualification and divestiture Securities in entities supervised by the Bureau. (2) Securities in collective investment funds. (e) Waivers. (1) Mitigating circumstances exist due to the way the employee or the employee's spouse or minor child acquired ownership or control of the security. Mitigating circumstances may include without limitation: (i) The employee or the employee's spouse or minor child acquired the security through inheritance, merger, acquisition, or other change in corporate structure, or otherwise without specific intent on the part of the employee or the employee's spouse or minor child; or (ii) The employee's spouse received the security as part of a compensation package in connection with employment or prior to marriage to the employee; (2) The employee makes a prompt and complete written disclosure of the security to the DAEO; (3) The disqualification of the employee from participating in particular matters pursuant to paragraph (d) of this section, as specified in the written waiver, would not unduly interfere with the full performance of the employee's duties; and (4) The granting of the waiver would not unduly undermine the public's confidence in the impartiality and objectivity with which: (i) The employee performs the employee's official Bureau duties; and (ii) The Division in which the employee works executes its programs and functions. (f) Covered third party entities. (1) A partnership in which the employee or the employee's spouse or minor child is a general partner; (2) A partnership or closely held corporation in which the employee or the employee's spouse or minor child individually or jointly holds more than a 10 percent equity interest; (3) A trust in which the employee or the employee's spouse or minor child has a vested legal or beneficial interest; (4) An investment club or similar informal investment arrangement between the employee or the employee's spouse or minor child, and others; (5) A qualified profit sharing, retirement, or similar plan in which the employee or the employee's spouse or minor child has an interest; or (6) An entity in which the employee or the employee's spouse or minor child individually or jointly holds more than a 25 percent equity interest. [82 FR 35885, Aug. 2, 2017] § 9401.107 Prohibition on acceptance of credit or indebtedness on preferential terms from an entity supervised by the Bureau. An employee or the employee's spouse or minor child may not accept credit from, become indebted to, or enter into a financial relationship with an entity supervised by the Bureau, unless the credit, indebtedness, or other financial relationship: (a) Is offered on terms and conditions no more favorable than those offered to the general public; and (b) Is not otherwise prohibited by law or inconsistent with the OGE Standards or the CFPB Ethics Regulations. [82 FR 35886, Aug. 2, 2017] § 9401.108 Restrictions on seeking, obtaining, or renegotiating credit or indebtedness from an entity that is a party or represents a party to a matter to which an employee is assigned or may be assigned. (a) General rules regarding seeking, obtaining, or renegotiating credit or indebtedness Prohibition. (2) Cooling off period. (b) Rules regarding credit or indebtedness secured by principal residence. (1) The residential real property is or will be the principal residence of the employee or the employee's spouse or minor child; (2) A minimum of three months have passed since the end of the employee's participation in each particular matter involving specific parties in which that entity was a party or represented a party; (3) The employee is disqualified from participating in particular matters involving specific parties in which that entity is a party or represents a party while the employee or the employee's spouse or minor child is seeking, obtaining, or renegotiating the credit or indebtedness; (4) The employee or the employee's spouse or minor child seeking, obtaining, or negotiating the credit or indebtedness must satisfy all financial requirements generally applicable to all applicants for the same type of credit or indebtedness for residential real property; and (5) The credit or indebtedness is obtained on terms and conditions no more favorable than those offered to the general public. (c) Specific rules for employee's spouse and minor child. (1) The credit or indebtedness is supported only by the income or independent means of the spouse or minor child; (2) The credit or indebtedness is obtained on terms and conditions no more favorable than those offered to the general public; and (3) The employee does not participate in the negotiating for the credit or indebtedness or serve as co-maker, endorser or guarantor of the credit or indebtedness. (d) Disqualification requirement for credit or indebtedness sought by person related to an employee. (1) The employee's spouse, domestic partner, or dependent child; (2) A partnership in which the employee or the employee's spouse, domestic partner, or dependent child is a general partner; (3) A partnership or closely held corporation in which the employee or the employee's spouse, domestic partner, or dependent child individually or jointly owns or controls more than a 10 percent equity interest; (4) A trust in which the employee or the employee's spouse, domestic partner, or dependent child has a vested legal or beneficial interest; (5) An investment club or similar informal investment arrangement between the employee or the employee's spouse, domestic partner, or dependent child, and others; (6) A qualified profit sharing, retirement, or similar plan in which the employee or the employee's spouse, domestic partner, or dependent child has an interest; or (7) An entity in which the employee or the employee's spouse, domestic partner, or dependent child individually or jointly holds more than a 25 percent equity interest. (e) Exemptions. (1) Revolving consumer credit or charge cards; (2) Overdraft protection on checking accounts and similar accounts; and (3) The provision of telephone, cable, gas, electricity, water, or other similar utility services provided on credit ( i.e., (f) Waivers. [82 FR 35886, Aug. 2, 2017] § 9401.109 Disqualification of employees from particular matters involving existing creditors or lenders. (a) Disqualification required. (1) The employee; (2) The employee's spouse, domestic partner, or dependent child; (3) A partnership in which the employee or the employee's spouse, domestic partner, or dependent child is a general partner; (4) A partnership or closely held corporation in which the employee or the employee's spouse, domestic partner, or dependent child individually or jointly owns or controls more than 10 percent of its equity; (5) A trust in which the employee or the employee's spouse, domestic partner, or dependent child has a vested legal or beneficial interest; (6) An investment club or similar informal investment arrangement between the employee or the employee's spouse, domestic partner, or dependent child, and others; (7) A qualified profit sharing, retirement, or similar plan in which the employee or the employee's spouse, domestic partner, or dependent child has an interest; or (8) An entity in which the employee or the employee's spouse, domestic partner, or dependent child individually or jointly holds more than a 25 percent equity interest. (b) Forms of credit and indebtedness exempted. (1) Revolving consumer credit or charge cards; (2) Overdraft protection on checking accounts and similar accounts; (3) Amortizing indebtedness on consumer goods (e.g., automobiles); (4) Automobile leases for primarily personal (consumer) use vehicles; (5) The provision of telephone, cable, gas, electricity, water, or other similar utility services provided on credit ( i.e., (6) Educational loans (e.g., student loans; loans taken out by a parent or guardian to pay for a child's education costs); and (7) Loans on residential homes (e.g., home mortgages; home equity lines of credit). (c) Credit or indebtedness of employee's spouse, domestic partner, dependent child, or other specified persons. (1) The credit or indebtedness is solely the responsibility of the person listed in paragraphs (a)(2) through (a)(8) of this section; and (2) The credit or the liability for repayment of the indebtedness is not dependent on, attributable to, or derived from the employee's income, assets, or activities. (d) Authorization to participate. [77 FR 25019, Apr. 27, 2012, as amended at 82 FR 35887, Aug. 2, 2017] § 9401.110 Prohibited recommendations. An employee shall not make recommendations or suggestions, directly or indirectly, concerning the acquisition or sale or other divestiture of a security in an entity supervised by the Bureau, or an entity that is a party or represents a party to a particular matter involving specific parties to which the employee is assigned. [82 FR 35887, Aug. 2, 2017] § 9401.111 Restriction on participating in matters involving covered entities. (a) Disqualification required. (b) “Covered entity” defined. (1) Any person for whom the employee is serving or seeking to serve, or has served within the last year, as officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee; or (2) Any person for whom the employee is aware the employee's spouse, domestic partner, fiancé, child, parent, sibling, stepfather, stepmother, stepson, stepdaughter, stepbrother, stepsister, half-brother, half-sister, or member of the employee's household is serving or seeking to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee. (c) Waivers. [82 FR 35887, Aug. 2, 2017] § 9401.112 Prohibited purchase of assets. An employee, or an employee's spouse or minor child, shall not purchase, directly or indirectly, any real or personal property from an entity supervised by the Bureau, unless it is sold at public auction or by other means which assures that the selling price reflects the asset's fair market value. § 9401.113 Waivers. The DAEO may grant a written waiver from any provision of this part where the DAEO finds good cause to do so; provided, however, that the DAEO will not do so unless the DAEO finds that the waiver is not inconsistent with the OGE Standards or otherwise prohibited by law and that, under the particular circumstances, application of the provision being waived is not necessary in order to avoid a violation of an ethics rule. Each waiver must be in writing and supported by a statement of facts and findings and may impose appropriate conditions, such as requiring the employee to execute a written disqualification statement.