The Consumer Financial Protection Bureau is proposing changes to its so-called no-action letter policy and proposing to establish a regulatory sandbox that would encourage banks to test new, innovative financial products. The revised policy would seek to improve the no-action letter process by eliminating several redundant or burdensome elements, streamlining the CFPB’s processing and review of the applications and expanding the types of relief available, among other things. ABA called on the bureau to revisit the policy in a comment letter earlier this year.
In addition, through the proposed “product sandbox,” banks could receive similar no-action relief, along with two additional forms of relief: “approval relief,” which expressly states that acts taken or omitted in conformity with the approval fall within a statutory “safe harbor” from liability, or “exemptive relief,” an exemption from a statutory or regulatory provision. The CFPB added that under the “sandbox” concept, it expects relief to be provided for a limited amount of time — in most cases, two years. Comments on the proposal are due 60 days after it is published in the Federal Register.