CFPB Finalizes Unavailing ‘No-Action’ Letter Policy

The Consumer Financial Protection Bureau today finalized a policy under which companies may request “no-action” letters indicating that bureau staff have “no present intention” to initiate enforcement or supervisory actions based on a particular product or aspect of a product. The policy is ostensibly aimed at facilitating innovation by providing companies a method for vetting new products for compliance concerns before launching them.

However — as ABA, the American Bankers Insurance Association and the Consumer Bankers Association have pointed out — the bureau’s policy does virtually nothing to reduce regulatory uncertainty. The letters would have limited scope and would not be able to be relied upon for compliance; moreover, the bureau envisions granting them only “rarely” and it does not guarantee the confidentiality of proprietary information included in the request.

In the policy, the CFPB said it expects to receive only one to three no-action requests per year. “[T]his may even exaggerate the number of requests the bureau receives should the process be finalized in its current form,” ABA, ABIA and CBA said.