In an effort to facilitate innovation in financial products and services, the CFPB is proposing a Policy on No-Action Letters. Under the policy, the CFPB would issue no-action letters to specific applicants who are introducing 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 CFPB would be applied.
As part of the application process, the CFPB would require an applicant to thoroughly demonstrate the characteristics of the proposed product, how it will work, and what consumer risks are involved. An applicant will need to explain exactly what regulatory uncertainty exists and how that uncertainty interferes with the development of the product. In addition, the applicant will need to demonstrate what consumer safeguards are in place and how consumer interests and safety will be monitored.
The no-action letter would advise the recipient that the bureau does not presently intend to recommend initiation of enforcement or supervisory action against the requester with regard to the specified matter. Issued no-action letters would be publically disclosed. No-action letter would be non-binding on the bureau and would not bind courts or other actors who might challenge the recipient’s product or service.
Comments on the proposal will be due 60 days after the proposal is posted in the Federal Register this week.
Read the CFPB blog post.
Read the proposal.