Earlier this summer, Consumer Financial Protection Bureau director Rohit Chopra compiled a blog post beneath the heading, “Rethinking the approach to regulations.”

Chopra articulate three reasons why the CFPB now sees it as “important to move away from the failed approach of the past.”

The director wrote, “Markets work best when rules are simple, easy to understand, and easy to enforce. The CFPB is seeking to move away from highly complicated rules that have long been a staple of consumer financial regulation and towards simpler and clearer rules.

“In addition, the CFPB is dramatically increasing the amount of guidance it is providing to the marketplace, in accordance with the same principles,” Chopra continued.

An example of what Chopra referenced arrived earlier this month when the bureau said it issued a legal interpretation to ensure that companies that use and share credit reports and background reports have a permissible purpose under the Fair Credit Reporting Act (FCRA).

Turning back to the blog post, Chopra wrote, “Regulators have historically issued overly complicated and tailored rules for the existing regulatory landscape, as opposed to providing basic bright-line guidance and rules that can withstand evolution of the marketplace over time.

“The CFPB aspires to more clearly communicate the agency’s expectations in simple and straight-forward terms, which will produce more durable guidance and rules, in addition to numerous other benefits,” he added.

So how might the CFPB arrive at those compliance goals to have their intended benefits? Here’s how Chopra articulate the path in that blog post.

“First, unnecessarily complex guidance and rules impede consumer protection, and instead simply increases compliance costs, which benefits larger market players and their high-priced lawyers. Unnecessary complexity places new entrants and small firms at a disadvantage compared to their larger competitors,” he wrote. “The CFPB plans to issue guidance in a manner that strengthens the compliance posture of all market participants, not just those with the most market power or resources.

“Second, simple bright-lines allow all parties to better understand the law and policy priorities, but also, prevent strategic or intentional ‘misunderstanding’ or plausible deniability that some companies use to ignore the law,” Chopra continued. “Complexity creates unintended loopholes, but it also gives companies the ability to claim there is a loophole with creative lawyering. Where guidance and rules are straight-forward and simple, entities are incentivized to redirect innovation and creativity away from regulatory evasion and towards better serving consumers. Simple bright-lines advantage law-abiding companies and disadvantage law breakers.

“Third, clarity and simplicity will promote consistency among government agencies responsible for enforcement of federal consumer financial law,” he added.

Chopra not only cited the CFPB, but he also mentioned the Federal Reserve Board of Governors and the Federal Trade Commission in connection with a review of rules the bureau inherited. Chopra specifically pointed out rules originally developed by the FTC to implement the FCRA in an effort to identify potential enhancements and changes in business practices.

“Many of these rules have now been tested in the marketplace for many years and are in need of a fresh look,” Chopra wrote.

The bureau director wrapped up his message by stating, “The CFPB will continue its efforts to clearly communicate the agency’s expectations in simple and straight-forward terms in the months ahead and we welcome the public’s input.”