CUs need equal access to CFPB No Action Letters, Product Sandbox

February 11, 2019

CUNA submitted a letter Monday in response to the Consumer Financial Protection Bureau’s (CFPB) proposal to amend its No-Action Letter (NAL) Policy and create a “Product Sandbox” to facilitate innovation, urging the bureau avoid creating an uneven playing field.

“CUNA highly recommends the Bureau refrain from taking an overzealous approach to innovation that places traditional depository institutions at an unjustified disadvantage,” the letter reads. “Innovation, through technology and other creative solutions, has the potential to enhance the delivery and quality of financial products and services to consumers…CUNA supports the CFPB’s effort to use its authority to encourage innovation through mechanisms like the NAL Policy and Product Sandbox so long as credit unions are given equal access to such programs and any approved programs are limited in number and narrow in scope.”

Other recommendations in the letter include:

  • The bureau should give a firm, clear and reasonable timeframe for its responses to a NAL request;
  • CUNA supports a proposed provision that the bureau may revoke a NAL, and recommends the CFPB permit the entity “reasonable latitude” to cure any potential failure prior to revocation;
  • CUNA strongly supports the bureau permitting group applications for an NAL, believing it increases the likelihood that credit unions can participate, as they often pool resources with other credit unions or other entities to attain access to programs or services a single credit union may not be able to;
  • CUNA supports a provision allowing for a reasonable “wind-down” period after an NAL has been revoked;
  • CUNA urges the bureau to make protections for NAL participating entities “as clear and binding as possible;”

Regarding the Product Sandbox, CUNA also urges the CFPB to adopt a group application process.