CFPB Sets Comment Deadline on Proposed Changes to No-Action Letter Policy

Comments on the proposal to streamline the bureau’s policy for innovation with that of other federal regulators are due Feb. 11.

1/10/2019 1:00 PM

CFPB Sets Comment Deadline on Proposed Changes to No-Action Letter Policy

The Consumer Financial Protection Bureau is seeking comments on its 2016 Policy on No-Action Letters for companies developing innovative financial products or services for consumers.

ACA International members and account receivable management industry professionals interested in implementing new and innovative processes should take note of the proposed policy and consider submitting comments on the bureau’s policy now available in the in the Federal Register. Comments are due Feb. 11.

According to the policy finalized in 2016, the bureau issued No-Action Letters to specific applicants in instances involving innovative financial products or services that promise substantial consumer benefit where there is substantial uncertainty whether or how specific provisions of statutes or regulations implemented by the bureau would be applied, ACA International previously reported.

However, the bureau provided only one No-Action Letter since the policy was finalized in February 2016.

“The bureau believes this strongly suggests that both the process required to obtain a No-Action Letter and the relief available under the 2016 Policy have not provided firms with sufficient incentives to seek No-Action Letters from bureau staff,” the proposed policy states. “Accordingly, the bureau is seeking comment on a number of changes to the 2016 policy that would address these issues and bring certain aspects of the bureau’s policy more into alignment with no-action letter programs offered by other federal regulators.”

It is also proposing a CFPB Product Sandbox policy with additional no-action relief in the form of three statutory safe harbor provisions and exemptions from statutory or regulatory provisions.

Product sandboxes or “regulatory sandboxes” essentially provide the opportunity for innovative products to be tested with consumers without complete regulatory burdens while the testing process continues.

Overall, the bureau’s proposed policy has the following overall goals:

  • Streamlining the application process;
  • Streamlining the bureau’s processing of applications;
  • Expanding the types of statutory and/or regulatory relief available;
  • Specifying procedures for an extension where the relief initially provided is of limited duration; and
  • Providing for coordination with existing or future programs offered by other regulators designed to facilitate innovation.

Related Content from ACA International:

BCFP Selects Director of Newly-Created Office of Innovation

BCFP Proposes Changes to No-Action Letter Policy Encouraging Industry Innovation

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