The CFPB, in a notice published in the Federal Register on September 27, 2022, announced that it was rescinding its No-Action Letter and Compliance Assistance Sandbox policies (Policies). The rescission was effective on September 30, 2022.
In the notice, the CFPB stated:
The CFPB determined that the Policies do not advance their stated objective of facilitation consumer-beneficial innovation. The CFPB also determined that the existing Policies failed to meet appropriate standards for transparency and stakeholder participation. The CFPB is developing new approaches to facilitate the development of new products and services.
The CFPB’s rescission of the Policies is not surprising. The Federal Register notice follows the CFPB’s announcement in a May 2022 blog post that as part of a new approach to innovation in consumer finance, it was replacing its Office of Innovation and Operation Catalyst with a new office, the Office of Competition and Innovation. In the blog post, the CFPB called the Policies “ineffective.” Despite the clear implication that the Policies were being eliminated at that time, a CFPB spokesperson indicated that the CFPB had not yet rescinded the Policies and was continuing to take new applications and processing previously submitted applications under the Policies.
The CFPB stated in the notice that it will continue to accept and process requests under its Trial Disclosure Policy and that entities that have made submissions under the rescinded Policies will be notified if the CFPB intends to take additional steps on such submissions. The notice does not address the status of no-action letters or sandbox approvals previously issued under the Policies. Law360 has reported that it received a statement from a CFPB spokesperson indicating that the notice does not extinguish previously approved and currently active letters and approvals.