On September 10, the Consumer Financial Protection Bureau issued three new policies to promote innovation and facilitate compliance: the Policy on No-Action Letters (NAL), Policy to Encourage Trial Disclosure Programs (TDP), and Policy on the Compliance Assistance Sandbox (CAS). The policies were proposed in 2018 and went through a period of public comment after their proposal.
The CFPB previously issued an NAL Policy in 2016 which allowed for NALs to be issued to provide increased regulatory certainty through a statement that the CFPB would not bring a supervisory or enforcement action under specifically articulated circumstances. The new NAL Policy provides a more streamlined review process to provide innovative products and services that will benefit consumers.
The new TDP Policy gives protections for entities to conduct trial disclosure programs and streamlines the application and review process. According to the Bureau, under the TDP Policy, “entities seeking to improve consumer disclosures may conduct in-market testing of alternative disclosures for a limited time upon permission by the Bureau.”
The new CAS Policy allows testing of a financial product or service when faced with uncertainty. The Policy provides applicants with a “safe harbor” from liability for previously approved conduct during the testing period. Approvals provided under the CAS Policy will protect applicants from liability under the Truth in Lending Act, the Electronic Funds Transfer Act, or the Equal Credit Opportunity Act.
In a statement regarding the new policies, CFPB Director Kathleen Kraninger stated, “Innovation drives competition, which can lower prices and offer consumers more and better products and services. New products and services can expand financial options, especially to unbanked and underbanked households, giving more consumers access to the benefits of the financial system. The three policies we are announcing today are common-sense policies that will foster innovation that ultimately benefits consumers.”