WASHINGTON (12/16/14)--No-action letters (NALs) from the Consumer Financial Protection Bureau (CFPB) could enhance innovation and competition in the financial marketplace, the Credit Union National Association believes. In a letter filed with the bureau Monday, CUNA expressed support for the CFPB's proposed rule but said additional specifics are needed.
The proposal would allow CFPB staff to issue NALs to specific applicants in instances involving "innovative financial products or services that promise substantial consumer benefit where there is substantial uncertainty." The bureau could send a letter advising the recipient that the CFPB does not presently intend to recommend enforcement or supervisory action involving the matter in question.
CUNA supports the policy and believes NALs "can be a valuable tool for credit unions and others alike," according to its comment letter, signed by Luke Martone, CUNA's senior assistant general counsel.
However, CUNA also has concerns that the level of complexity and detail addressed by some of the factors in the proposal may make it "difficult or impossible" for some credit unions to successfully obtain a NAL.
"An example of a factor that credit unions may have difficulty with is: 'The extent to which evidence, including the requester's own testing, indicates that the product's aspects in question may provide substantial benefits to consumers,'" the letter reads. "Smaller credit unions may not have the resources to develop such evidence as thoroughly as the CFPB may intend. We urge the CFPB to consider adding to the policy that, as part of the assessment process, CFPB staff should take into account the size and complexity of the requesting financial institution."
As proposed, CFPB staff have sole discretion on whether and how to respond to a request for a NAL. The bureau can grant the request, deny the request, decline to grant or deny with an explanation or decline to grant or deny without an explanation.
CUNA believes the fourth option should be eliminated, saying it is "unable to contemplate a situation in which it would make sense to neither grant nor deny a request without an explanation." CUNA believes if bureau staff have dedicated time to review the request, any additional resources needed to provide an explanation would be minimal.
The proposal does not include a timeframe for CFPB staff to respond to a NAL request. CUNA has requested that the agency establish a timeframe, preferably no more than 45 days.