The CFPB has issued a proposed policy where it would issue no-action letters in limited circumstances. The proposed policy is designed for new financial products or services where there may be uncertainty about how they fit in the existing statutes and regulations.
Under the proposed policy, the no-action letter would not be an available tool unless the applicant shows the product holds the promise of substantial consumer benefit. As part of the application process, the CFPB will 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.
If the CFPB “specifically declines” to either grant or deny the request, either with or without explanation, the CFPB may publish its response on the Bureau’s website, particularly if the staff believes that the information will be in the public interest.
The CFPB cautions no-action letters will not be routinely available. The Bureau anticipates that no-action letters will be provided only rarely and on the basis of exceptional circumstances and a thorough and persuasive demonstration of the appropriateness of such treatment.