The policies allowed companies to test certain processes and products without enforcement actions to facilitate innovation benefiting consumers. Regulated entities will be notified by the bureau related to additional steps on these policies.
10/14/2022 12:00 P.M.
2 minute read
The Consumer Financial Protection Bureau has revised its policy on No-Action Letters and the Compliance Assistance Sandbox, stating they are no longer effective for “facilitating consumer-beneficial innovation.”
According to the notice on the Federal Register, the policies are rescinded effective Sept. 30.
The policies were issued in September 2019.
“The CFPB determined that the policies do not advance their stated objective of facilitating consumer-beneficial innovation. The CFPB also determined that the existing policies failed to meet appropriate standards for transparency and stakeholder participation,” according to the Federal Register notice. “The CFPB is developing new approaches to facilitate the development of new products and services.”
As part of the end to these policies, the CFPB will no longer accept No-Action Letters or Compliance Assistance Sandbox (CAS) applications.
No-Action Letters allowed businesses to test their products with a regulatory safe harbor, meaning the bureau would not take an enforcement action against the submitting company for certain conduct while the letter was in effect.
The primary purpose of the CAS Policy was to provide a mechanism through which the bureau could more effectively carry out its statutory purpose and objectives by better enabling compliance in the face of regulatory uncertainty, according to the CFPB.
The CFPB says it will continue to accept and process requests under the Trial Disclosure Policy “to ensure consumers are provided with timely and understandable information to make responsible decisions about financial transactions; outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens; and markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.”
Regulated entities that have made submissions under the No Action Letter or Compliance Assistance Sandbox Policies will be notified if the CFPB intends to take additional steps on such submissions.
Read more on the policy changes here.
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