As part of its ongoing effort to foster financial services innovation, the Consumer Financial Protection Bureau today issued three new policies to help banks safely and compliantly develop innovative products and services. The bureau published an updated no-action letter policy, a trial disclosure program policy and a compliance assistance sandbox policy. It also issued its first no-action letter under the new policy.
The no-action letter policy issued today makes improvements to the bureau’s existing 2016 policy, establishing a more streamlined review process, among other things. The trial disclosure program policy enables institutions to conduct in-market testing of alternative disclosures for a limited time, subject to CFPB approval. Finally, the sandbox will provide a safe harbor for banks to test products or services that have been approved by the bureau.
The American Bankers Association supported these efforts in previous comments and welcomed the bureau’s action today. “Regulatory uncertainty can hinder the development of innovative products and services that benefit consumers and expand access to the financial system,” said ABA President and CEO Rob Nichols. “The trial disclosure program, compliance assistance sandbox and no-action letter policies announced today will contribute to an environment where innovation can flourish.”
The CFPB also announced the creation of the American Consumer Financial Innovation Network—a partnership with several state bank regulators to enhance coordination and facilitate innovation. “This collaboration will further reduce regulatory uncertainty, promote innovation and increase competition that benefits consumers,” Nichols added.