United States

CFPB No-Action Letter policy

COMPLIANCE NEWS  | 

The Consumer Financial Protection Bureau (CFPB or Bureau) issued a final policy statement outlining the details of its No-Action Letter (NAL) policy. The NAL policy is intended to "facilitate consumer access to innovative financial products that promise substantial benefit to consumers…and also to enhance compliance with applicable federal consumer financial laws." It is also intended to discourage offering consumer financial products that are harmful to consumers.

Under the policy, entities may submit a request for an NAL to the Bureau. If an NAL is provided, it is an indication that the Bureau "has no present intention to recommend initiation of an enforcement or supervisory action against the requester with respect to particular aspects of its product, under specific identified provisions of statutes or regulations."

Requests for NALs must include 15 items of information and affirmations relating to the product, including:

  • How the product is likely to provide substantial benefit to consumers
  • A summary of the potential risks posed by the product
  • Each regulatory provision where uncertainty exists, the nature of the uncertainty, why the product should not be precluded based on this uncertainty, why the uncertainty cannot be addressed in a different manner and how the product complies with other relevant regulatory requirements
  • A description of consumer safeguards the requester will employ, why the safeguards would be effective and actions the requester will take to evaluate the actual effectiveness of the safeguards

If the NAL is granted, it may include a variety of conditions. Whether or not, and how to respond to an NAL request is solely within the discretion of the Bureau’s staff. Conditions included in an NAL may include:

  • Duration of the NAL
  • Number of transactions
  • Consumer protection actions such as increased disclosures
  • Data sharing between the requester and the Bureau

The NAL policy includes detailed information relating to the items considered when determining if the NAL will be provided.

NALs may be modified or revoked at any time, and are not binding on the Bureau, courts or other parties (such as other regulators or litigants) that may challenge the product or service that is the subject of the NAL.