The Consumer Financial Protection Bureau (“CFPB”) recently issued a proposal consisting of (i) revisions to its Policy on No-Action Letters — which was finalized in February 2016 (“2016 Policy”) — designed to increase interest in applying for no-action letters (“NALs”) under the 2016 Policy; and (ii) the creation of a CFPB Product Sandbox (collectively, the “Proposal”). The Proposal was issued by the CFPB, among other reasons, to spur innovation in the fintech sector. Comments on the Proposal will be due 60 days after its publication in the Federal Register.

Under the 2016 Policy, which provides for the issuance of NALs consisting of non-binding staff-level no-action recommendations, the CFPB has issued only one such letter to date. The Proposal, which is intended to better incentivize firms — including fintech companies — to seek NALs from the CFPB, has the following overarching goals:

  • Streamlining the application process;
  • Streamlining the CFPB’s processing of applications;
  • Expanding the types of statutory and regulatory relief available;
  • Specifying procedures for an extension where the relief initially provided is of limited duration; and
  • Providing for coordination with existing or future programs offered by other regulators designed to facilitate innovation.

The Proposal was filed on Dec. 10, 2018 and signed by Mick Mulvaney on the last day of his tenure as acting director of the CFPB. Kathy Kraninger, who was sworn in as the director of the CFPB later that same day, has not publicly opined on her position on the Proposal.

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