The Consumer Financial Protection Bureau (Bureau) issued its final policy on its issuance of no-action letters on February 18, which is intended to further objectives under section 1021 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Under the Policy, Bureau staff would, “in its discretion, issue no-action letters (NALs) 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 implemented or regulations issued by the Bureau would be applied . . .” According to the Bureau, a NAL would advise the recipient that, subject to its stated limitations, the staff has no present intention to recommend initiation of an enforcement or supervisory action against the requester with respect to a specified matter. However, NALs would be subject to modification or revocation at any time at the discretion of the staff, and may be conditioned on particular undertakings by the applicant with respect to product or service usage and data-sharing with the Bureau. Further, NALs would be nonbinding on the Bureau, and would not bind courts or other actors who might challenge a NAL recipient’s product or service, such as other regulators or parties in litigation.
According to industry critics, the limits on the protection that the no-action letters provide have raised fears that the new policy will not supply the space that companies need to come up with new and novel ways to serve customers.
The Bureau’s policy is available here.