The Bureau’s eRegulations parsing errors were the topic of user tips in my previous post. This post describes where and how to verify the text. For the purposes of this article, we examine the parsing error in the header of 12 C.F.R. § 1026.36(d)(1). The eRegulations heading reads “Payments based on transaction terms or conditions.” However, it should read “Payments based on a term of a transaction.” We will look at each step of review showing how we know the eRegulations are wrong and explain along the way where to look for the proper language.

Where to verify the text of regulations

Regulations are first published in the Federal Register. The writing of regulations is governed by the Administrative Procedures Act which requires final regulations to be published in the Federal Register. The Federal Register is a daily publication of the Government Printing Office. When final regulations are published, they either: 1) describe the completely new regulation text with previously unused parts, sections, paragraphs, etc. or 2) describe amendments to existing regulations by describing what text is deleted and what text is added, including the specific citation of where that text belongs.

For a primer on understanding citations in the Code of Federal Regulations see my post on Understanding Federal Regulation Citations. It uses the same example we will use here, 12 CFR § 1026.36(d)(1).

In our example, Reg. Z was revised by final rule published in the Federal Register, 78 Fed. Reg. 11280, 11411, (Feb. 15, 2013). That is Volume 78 of the Federal Register, published February 15, 2013 beginning at page 11280 and the page where our particular change is referenced is 11411. This final rule language amended the Federal Reserve Board’s originator compensation rule, aligning it with Dodd-Frank’s elimination of a reference to “conditions.”

To view the appropriate section of the Federal Register, follow these steps:

1. From the eRegulations interface, click on the "Regulation Timeline" icon at the top of the left side of the screen (it looks like a clock next to a list).

2. Under the date of the section you are viewing there will be a published date under the heading “final rule.” Click that published date.

   • For our example, click on the regulation timeline version effective date of 1/1/2014.
   • Under the 1/1/2014 effective date you will see five publication dates for final rules that were effective on January 1, 2014.
   • Click on the “Published 2/15/2013” link.

3. The Federal Register website will appear on the landing page for the particular Bureau publication of the final rule. Scroll down in the table of contents to find the relevant section. Note that the relevant section may be described multiple times, in the preamble, as well as the revised rule text. For the official text of the regulation you want to be in the section following the heading “PART 10[] – [] (REGULATION [])” where the relevant part, statute name, and regulation are supplied.

   • For our example, scroll down to PART 1026—TRUTH IN LENDING (REGULATION Z)
   • Under Subpart E and § 1026.36, locate 36(d)(1) Payments Based on a Term of a Transaction. Click on it.
   • Compare the heading to the heading in the eRegulations and you will see that the eRegulations is different.

That is because it was not updated by the parsing tool to reflect the 2/15/2013 heading that now reads “1. Compensation that is “based on” a term of a transaction.”

4. Now scroll up until you see the instructions for insertions and deletions for the section. Review the instructions to be sure you are properly interpreting the changes.

For our example, the changes are just above the heading “§ 1026.36 Prohibited acts or practices and certain requirements for credit secured by a dwelling.” The instructions are preceded by black square bullet points. They indicate that “Section 1026.36 is amended by… revising paragraphs (d)(1)…” From those instructions we know that the text we just read should have replaced the pre-existing text for that section.

Amendments to Supplement I, the Official Interpretations, will be in their own section and you will have to read through the text for the appropriate subsection’s reference. This may take some hunting, which is why the eCFR comes in handy.

Validating changes since the original Federal Register publication We viewed the version of the Federal Register where the particular change was first made. To be sure it has not changed again since that date we would have to do two things:

• If the original change took place prior to the publication of the most recent version of the official text of the Code of Federal Regulations, review the most recent official text; and

• Review every version of the Federal Register that updated Reg. Z since the later of:

  • the Federal Register publication with the original change; or
  • the most recent publication of the official text of the Code of Federal Regulations.

But there is an easier way than that if you trust the eCFR, the GPO's unofficial interim publication. First we describe checking the official Code of Federal Regulation, then we describe using the eCFR.

The official Code of Federal Regulations is published annually

The official Code of Federal Regulations (Annual Edition) compiles the incremental rules published in the Federal Register and codifies them as law. The Official Code is updated annually with different groups of titles being updated in the first day of each quarter. Banking regulations are contained in Title 12 of the Code of Federal Regulations. Titles 1-16 are published annually on January 1, so if the law you want to verify was published before the first of the year, verify by checking the official Code of Federal Regulations (Annual Edition).

To view the appropriate section of the official Code of Federal Regulations (Annual Edition), follow these steps:

1. Navigate to https://www.gpo.gov/fdsys/browse/collectionCfr.action?collectionCode=CFR. Select the desired title.
   • For our example, select title 12 – Banks and Banking
2. Select the desired chapter.
   • For our example, select chapter 10 – Bureau of Consumer Financial Protection
3. Select the desired part.
   • For our example, select part 1026 – TRUTH IN LENDING (REGULATION Z)
4. Select the desired subpart. Here you might have to try several subparts to find the one you want.
   • For our example, select Subpart E.
   • Note that the subparts are below the list of appendices. That is a little odd, because appendices normally come after the body of the material.
5. Select the pdf link to the right of the section you desire.
   • Scroll through the regulation text to the subparagraph you desire. For our example, subparagraph (d)(1) begins in the lower right column of the third page of the pdf (showing page 99 at the bottom of the page).
   • Note that the language here is the same as in the Federal Register and the eCFR but different from what was in the eRegulations.

The eCFR unofficially compiles Federal Register publications throughout the year

The eCFR is not the official text of the Code of Federal Regulations and it is not the original Federal Register publication of final regulations. However, it is produced by the Government Printing Office and, as of the time of this writing, is more reliable than the Bureau’s eRegulations. Because it eliminates examining every change to a regulation published throughout the year in the Federal Register the eCFR is an effective tool. Use the eCFR only when the Federal Register publication date of the regulations you are reviewing is after the first of the current year. If you are looking for regulations from prior to the first of the year use the official Code of Federal Regulations (Annual Edition) as described above.

To view the appropriate section of the eCFR, follow these steps:

1. Navigate to http://www.eCFR.gov/cgi-bin/ECFR?page=browse
2. Select your desired title from the dropdown field
   • For our example, select title 12.
3. Click Go.
4. Click the parts to view from the table displayed.
   • For our example, Reg. Z is found in volume 9 which covers chapter X parts 1026-1099. This is where understanding the citations described above really saves time.
5. The next screen will show a list of those parts and the Regulation description.
   • Our example will show Part 1026 with a heading of TRUTH IN LENDING (REGULATION Z)
6. Click the part number or table of contents link.
7. The table of contents screen shows the date through which the eCFR is current in red at the top of the screen, usually the business day before viewing.
8. Scroll down and click your desired section.
   • For our example, click “§ 1026.36 Prohibited acts or practices and certain requirements for credit secured by a dwelling.” It is in Subpart E.
9. Scroll down to the subparagraphs desired and compare to the eRegulations.
   • For our example, scroll to “(d) —(1) ”
   • Note that the language here is different than in the eRegulations

Our example reveals the parsing error in eRegulations

The fact that the text was revised on February 15, 2013, was indicated by the Federal Register publication we examined. That the 2016 official Code of Federal Regulations (Annual Edition) has the same text as the February Federal Register indicates the rule has not been revised through January 1, 2016 (or at least that if it did change in that time it was changed back again). The fact that the eCFR has the same text as the 2016 official Code of Federal Regulations (Annual Edition) indicates the rule was not revised through the day before you viewed it. Thus, the difference in text in the eRegulations must be because the eRegulations are erroneous. By looking up the 2015 Annual Edition you will see that the eRegulations have the old language and the parser somehow skipped the change to the title that was published on February 15, 2013, that took effect on January 1, 2014.

Official publication of interim updates have to be verified in the Federal Register based on the day they were published, as described above. However, you would have to check every Federal Register publication for the particular regulation since the beginning of the year to bring it current. To streamline this for interim rule validation, use the eCFR. Though not official, the eCFR is more reliable than the Bureau’s current version of eRegulations.

Using the eRegulations interface should be very appealing at this point because the user experience is so much better than any of these tools. That is precisely the problem. The eRegulations are pretty, easy, and mostly right. But mostly right might not be sufficient to make a significant business decision. In the very least, until the eRegulations parser errors are corrected, verify with eCFR to be sure your decision is based on the law of the land.