CFPB Proposes New No-Action Letter Process

The No-Action Letters would indicate that at the time of the request, the CFPB would not initiate an enforcement action regarding a specific “innovative” financial product or service.  This would be limited to a new financial product or service that promises substantial customer benefit and where there is substantial uncertainty about how specific laws or CFPB regulations would be applied.


No-Action Letters, as a process, can be very beneficial to the public.  Providing certainty on specific enforcement issues helps with CFPB enforcement and industry compliance.


One of the programs that CFPB regulates is RESPA—the Real Estate Settlement Procedures Act.  RESPA was administered by HUD before the CFPB was created and one issue with HUD enforcement was the lack of an accessible No-Action Letter process.  There was a process for seeking HUD unofficial interpretations, but it was difficult to access and was of limited usefulness.  A CFPB No-Action Letter process would provide administrative benefits, if used more broadly than the  current proposal.  


The CFPB is seeking comments by December 15, 2014.