CFPB States That it Did Not Scrap No-Action Letter and Compliance Assistance Sandbox Programs in Connection with its Overhaul of its Office of Innovation and Operation Catalyst

On May 25, 2022, my colleagues, Mike Gordon, John Culhane and Ron Vaske published a blog which reported on a press release issued by the CFPB on the prior day entitled “CFPB Launches New Effort to Promote Competition and Innovation in Consumer Finance.”  The blog stated:

In its press release, the CFPB states that “[a]fter a review of these programs [the No Action Letter (NAL) and Compliance Assistance Sandbox (CAS) programs], the agency concludes that the initiatives proved to be ineffective and that some firms participating in these programs made public statements indicating that the Bureau had conferred benefits upon them that the Bureau expressly did not.”

In lieu of a company filing an application for an NAL or participation in a CAS, both of which apply to an individual company’s specific product offering, the press release encouraged companies, including start-ups, to file rulemaking petitions to ask for greater clarity in particular rules.  The Bureau states that any action taken in response to a rulemaking petition “will apply to all companies in the market.”