From Collector: Sandbox Rules


7/30/2019 8:00 AM

ACA supports the CFPB’s efforts to encourage financial services innovation.

NewsCollector Magazine

Earlier this year, the Consumer Financial Protection Bureau sought comments on a new policy surrounding no-action letters (NAL) and a “product sandbox,” signaling a more serious commitment to innovation than what we have seen in the past.

The bureau proposed overhauling parts of the NAL while also providing certain safe harbors and regulatory and statutory relief for those seeking to participate, Leah Dempsey, ACA International’s vice president and senior counsel of federal advocacy, reports in the July issue of Collector magazine.

This initiative, which runs parallel to rulemaking for the debt collection industry, could offer an opportunity for the industry to try new disclosures, technologies, or other ways of innovating.

However, several questions remain about how this initiative will pertain to the accounts receivable management industry, which arguably need to be answered before it can be a useful tool for ACA members.

Notably, the CFPB’s 2016 policy provided only one NAL. As the CFPB noted in its request for comment when considering new policies, “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 bureau seeks comments on changes to the 2016 policy that would address these issues and bring certain aspects of the policy into alignment with NAL programs offered by other federal regulators.

ACA filed comments and has held meetings with the CFPB in support of its fresh look at the initiative. In our comments, we stated that we believe the accounts receivable management industry would benefit significantly from the NAL and product sandbox initiatives. We argued that the industry is ripe for testing new ideas and incorporating technologies into current processes in order to achieve industrywide standards that consumers want, and provide better protections for consumers by establishing clear-cut regulatory expectations.

The bureau indicated that some of its overarching goals for the NAL and sandbox policy are to streamline the application process, expand the types of statutory and/or regulatory relief available and potentially coordinate with existing or future programs offered by other regulators designed to facilitate innovation.

ACA urged the CFPB to provide clarity on several aspects of the proposal and is awaiting more information about how NAL and the product sandbox will work for the debt collection industry, Dempsey reports.

In the meantime, we encourage ACA members to consider how they might want to use this opportunity to innovate. We continue to seek clarity from the CFPB and are more than willing to assist ACA members who are interested in having further discussions with the bureau about these programs.

Subscriptions to the Collector magazine digital edition and email notifications for each new issue are available for ACA International members by logging in to ACA International’s website here. Members and nonmembers can also purchase a print subscription. Nonmembers can create a guest profile on ACA’s website to subscribe to available publications.

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