BCFP Proposes to Revise the 2016 No-Action Letter Policy and to Create New Product Sandbox

The BCFP has issued notice of rulemaking and requests comments on the proposed rule that would revise the BCFP’s 2016 Policy on No-Action Letters and would create a new product sandbox.  The proposed rule was developed in an effort to streamline the process to apply for a No-Action Letter and incentivize firms to seek these letters from Bureau staff.

The BCFP would amend the 2016 Policy by eliminating elements from the application that the Bureau believes are unduly burdensome and redundant, such as the commitment to data-sharing.  Additionally, under the proposed rule, whether a No-Action Letter application is granted will depend on the quality and persuasiveness of the application, with particular emphasis on the provided explanation of the potential consumer benefits of the product or service and/or the manner in which it is offered or provided; the explanation of the potential consumer risks posed by the product or service and/or the manner in which it is offered or provided, and how the applicant intends to mitigate such risks; and the identification of the statutory and/or regulatory provisions from which the applicant seeks no-action relief and an identification of the potential uncertainty, ambiguity, or barrier that such relief would address.  The Bureau also intends to grant or deny the No-Action Letter applications within 60 days of completion.  Finally, the proposed rule also states that the Bureau is interested in entering agreements with State authorities that issue similar forms of no-action relief that would provide for an alternative means of receiving a No-Action Letter from the Bureau.

Part II of the proposed rule describes the new BCFP Product Sandbox.  Those who receive approval by the Bureau to participate in the Product Sandbox will have a “safe harbor” from liability under the applicable statutes as to any act done or omitted in good faith in conformity with the approval.  The participants would be immune from enforcement action by any federal or state authorities, as well as from lawsuits brought by private parties.  Additionally, the participants will be able to obtain no-action relief like the one found in the 2016 Policy described above. The Bureau will grant an application for admission to the Product Sandbox based on the same factors for which it grants a No-Action Letter.  As with the Part I of the proposed rule, the Bureau wishes to coordinate with other regulators and is interested in entering into agreements with state authorities that operate or plan to operate a state sandbox that would provide for an alternative means of admission to the BCFP Product Sandbox.

Comments must be received by February 11, 2019.

The full text of the proposed rule may be found here.