The CFPB yesterday issued three new policies intended to promote innovation and facilitate compliance: the No-Action Letter Policy, Trial Disclosure Program Policy and Compliance Assistance Sandbox Policy. The bureau proposed the policies in 2018 and received public comments on each.
NALs are intended to provide increased regulatory certainty through a statement that the bureau will not bring a supervisory or enforcement action against a company for providing a product or service under certain facts and circumstances. The CFPB says the new NAL Policy improves on the bureau’s 2016 NAL Policy by having, among other things, a more streamlined review process focusing on the consumer benefits and risks of the product or service in question.
The bureau issued its first NAL under the new policy in response to a request by the Department of Housing and Urban Development on behalf of more than 1,600 housing counseling agencies that participate in HUD’s housing counseling program.
Under the new TDP Policy, entities seeking to improve consumer disclosures may conduct in-market testing of alternative disclosures for a limited time upon permission by the bureau.
The CAS Policy enables the testing of a financial product or service where there is regulatory uncertainty. After the bureau evaluates the product or service for compliance with relevant law, an approved applicant that complies in good faith with the terms of the approval will have a “safe harbor” from liability for specified conduct during the testing period.
The bureau yesterday also announced the formation of the American Consumer Financial Innovation Network, along with several state regulators. The network is intended to enhance coordination among federal and state regulators to facilitate financial innovation. The bureau worked in partnership with multiple state regulators to launch the network, though New York was not among them.
The initial members of ACFIN are the attorneys general of: Alabama, Arizona, Georgia, Indiana, South Carolina, Tennessee and Utah.