1970 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 

21CFPB PACE Report at 50. 

22See. e.g., Meredith Fowlie, Michael Greenstone 

& Catherine Wolfram, Do Energy Efficient 

Investments Deliver? Evidence from the 

Weatherization Assistance Program, 133 Q.J. of 

Econ. 3 (Aug. 2018). 

23See 88 FR 30388 at 30421, table 1. 

24CFPB PACE Report, supra note 7 at 14–15; 

California Distributed Generation Statistics, 

Californiadgstats.ca.gov. 25 15 U.S.C. 1639c(b)(3)(C)(iii)(II). 

to-repay requirements, and while this 

reduced PACE volumes by around 50 

percent, it did not eliminate PACE 

lending. Further, given that California 

already has requirements for PACE 

lenders to consider consumers’ incomes 

before extending a loan, any reduction 

in loan volume in that State is likely to 

be more limited. And PACE financing 

loan volumes have declined over time 

from their peak in 2018,21 such that 

future environmental impacts may be 

less than historical estimates. 

Second, based on the limited 

information available in the white paper 

referenced through the commenter, 

those estimates seem to rely on 

engineering estimates of the potential 

benefits of the home improvements. 

Significant academic literature indicates 

that energy efficiency improvements 

frequently underperform engineering 

estimates in real world scenarios.22 This 

may occur due to imperfect installation, 

imperfect maintenance, or rebound 

effects (that is, energy efficiency leading 

to increased consumption due to 

reducing the cost of consumption). 

Third, the commenter’s estimates 

assume that the projects funded by 

PACE financing would not be 

completed without PACE financing. In 

practice, consumers may find other 

forms of financing, or may pay in cash. 

Indeed, some evidence suggests this 

may happen frequently. The CFPB has 

documented that, based on public data 

from California, PACE borrowers seem 

to frequently repay their PACE loans 

early, with as many as 40 percent prepaying.23 Although consumers may be 

required to pay off their PACE loans in 

order to sell their property, this statistic 

suggests that many consumers may have 

had other sources of funds to cover their 

home improvements, and thus would 

likely complete the project funded by 

the PACE loan even if PACE loans were 

not available. The CFPB also analyzed 

public data on solar installations in 

California for purposes of considering 

potential environmental effects of the 

proposed rule for this environmental 

assessment.24 Solar projects were by far 

the most common type of project funded 

by PACE in California from 2014–2019. 

At the peak of PACE financing activity 

in California in 2017, about 6 percent of 

distributed solar generation projects in 

California were funded by PACE loans. 

However, when PACE loans declined in 

2018 following California’s ability-topay legislation, there was no noticeable 

drop in new solar installations, 

indicating that many solar projects 

funded by PACE loans would still have 

been completed without PACE being 

available. The CFPB also notes that by 

2022, only a few dozen solar projects in 

California were funded by PACE loans 

each month. 

Environmental Impacts of Alternatives 

to the Proposed Action 

As discussed above, the CFPB 

considered the impacts of its proposed 

rule relative to the alternative of no 

action. Under the no-action scenario, 

currently projected environmental 

impacts would not meaningfully 

change. 

Agencies and Persons Consulted 

As part of the CFPB’s PACE 

rulemaking, EGRRCPA section 307 

requires that the CFPB ‘‘consult with 

State and local governments and bondissuing authorities.’’ 25 In consultation 

calls conducted in November 2024 in 

furtherance of this requirement, CFPB 

staff notified State and local 

governments and bond issuing 

authorities of the CFPB’s intent to 

prepare this environmental assessment 

and finding of no significant impact, 

and shared the CFPB’s preliminary 

conclusion that the proposed rule 

would not have significant impacts on 

the environment. CFPB staff invited 

input from call participants on that 

preliminary conclusion but did not 

receive any. In addition, this 

environmental assessment responds to 

comments that the CFPB received on the 

NPRM suggesting that the CFPB conduct 

an analysis of the NPRM’s effects on the 

environment. 

II. Finding of No Significant Impact 

Based on its review of the proposed 

rule and consideration of comments, the 

CFPB has determined that the proposed 

rule, with the adjustments as finalized, 

will not significantly affect the quality 

of the human environment. No 

reasonably foreseeable significant 

environmental impacts are expected 

from the proposed rule. Therefore, the 

CFPB has determined that the 

preparation of an environmental impact 

statement is not required for the 

proposed action, and a finding of no 

significant impact is appropriate. This 

finding of no significant impact 

incorporates the environmental 

assessment set forth in this notice by 

reference. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2024–30629 Filed 1–8–25; 8:45 am] 

BILLING CODE 4810–AM–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

Policy Statement on No-Action Letters 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Policy statement. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing this 

policy statement on No-Action Letters 

(Policy), which is intended to further 

objectives under section 1021 of the 

Consumer Financial Protection Act. 

DATES: This policy statement is 

applicable on January 10, 2025. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

The CFPB is accepting applications 

for No-Action Letters (‘‘NALs’’), as set 

forth in the policy statement below and 

subject to Conditions to Promote 

Innovation, Competition, Ethics and 

Transparency (‘‘the Conditions’’). The 

Conditions would be incorporated into 

individual NALs and serve several 

purposes. 

To summarize the Conditions, they 

are first designed to ensure that NALs 

promote innovations that solve unmet 

needs in markets for consumer financial 

products and services. Minor 

adjustments to existing products, or 

products that are designed to take 

advantage of gaps in laws rather than 

bringing new offerings to market, do not 

confer significant enough benefit on 

consumers to warrant the expenditure of 

government resources necessary to issue 

and monitor a NAL. Granting Letters in 

such circumstances misallocates 

government resources towards 

advantaging slight variations of what is 

essentially the same product that is 

currently available in the market. The 

Conditions therefore aim to enable 

innovations that solve real problems 

that consumers face in financial 

markets. 


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1See, e.g., Letter to Dave Girouard, CEO, Upstart 

Network, Inc. (Feb. 13, 2023) (expressing ‘‘concern 

about a recent report that found lenders’ use of 

educational data to make credit determinations 

could have a disparate impact on borrowers of 

color’’), https://www.brown.senate.gov/imo/media/ 

doc/2020-02-13%20Senate%20letter%20to%20

Upstart.pdf; Fair Lending Monitorship of Upstart 

Network’s Lending Model (Mar. 27, 2023) 

(identifying ‘‘approval disparities for Black 

applicants’’), https://www.relmanlaw.com/assets/ 

htmldocuments/Upstart%20Final%20Report.pdf. 

2 84 FR 48229 (Sept. 13, 2019). 

3Statement on Competition and Innovation, 87 

FR 58439 (Sept. 27, 2022). 

4 Id. 

5MARCO DI MAGGIO, DIMUTHU 

RATNADIWAKARA, & DON CARMICHAEL, 

INVISIBLE PRIMES: FINTECH LENDING WITH 

ALTERNATIVE DATA, 3 (HARVARD BUSINESS 

SCHOOL, 2021), https://www.hbs.edu/ris/ 

Publication%20Files/22-024_80dc9115-69cc-4564- 

99c6-3a937f275d31.pdf. 

6https://www.consumerfinance.gov/rules-policy/ 

competition-innovation/granted-applications/. 

7https://ir.upstart.com/news-releases/newsrelease-details/upstart-announces-closing-initialpublic-offering-and-full. 

8https://www.reuters.com/technology/lendingplatform-upstarts-shares-jump-nasdaq-debut-2020- 

12-16/. 

9Relman Colfax PLLC, Fair Lending Monitorship 

of Upstart Network’s Lending Model: Initial Report 

of the Independent Monitor, April 14, 2021, https:// 

www.relmanlaw.com/media/cases/1088_

Upstart%20Initial%20Report%20-%20Final.pdf. 

10Relman Colfax PLLC, Fair Lending Monitorship 

of Upstart Network’s Lending Model: Fourth and 

Final Report of the Independent Monitor, March 27, 

2024, available at https://www.relmanlaw.com/ 

assets/htmldocuments/Upstart%20Final%20

Report.pdf. 

11 Id. 

12 In re November 30, 2020 No-Action Letter, 

Order to Terminate No-Action Letter (June 8, 2022), 

available at https://files.consumerfinance.gov/f/ 

documents/cfpb_upstart-no-action-lettertermination_order_2022-06.pdf. 

Second, the Conditions ensure that 

NALs do not compromise the 

competitive process. Innovation is 

maximized by competitive, open 

markets and robust rivalry among firms. 

In seeking to promote innovation, the 

NAL program must not tilt the 

competitive playing field by picking 

winners and losers in markets, or 

appearing to do so. For this reason, the 

CFPB will affirmatively reach out to 

program applicants’ competitors and 

invite them to apply for the same NAL 

topic. The CFPB will not approve a NAL 

on a topic for a single firm, to avoid 

granting a first-mover advantage in the 

market. The Conditions also prevent 

firms from advertising the receipt of a 

NAL, which can create the false 

appearance of endorsement or favored 

regulatory status and can distort 

competition. 

Third, the Conditions promote 

transparency and rigorous ethical 

standards. The CFPB will post 

applications for NALs to an open docket 

on the regulations.gov website and will 

accept comment for 60 days. To avoid 

ethical conflicts, the CFPB will not 

consider applications from former CFPB 

attorneys representing firms as outside 

counsel. The CFPB is concerned that 

former CFPB employees will use their 

relationships to obtain special treatment 

for specific firms in procuring NALs, or 

that there is a risk of the appearance of 

special treatment by the public or 

specific firms seeking outside counsel. 

Because applicants’ integrity is also 

critical for the programs’ success, NALs 

will not be granted to firms that have 

been prosecuted for prior violations of 

federal consumer financial law in the 

last five years. And to prevent bait-andswitch negotiation tactics experience 

under the prior NAL policy, where firms 

negotiated terms of NALs with the CFPB 

and thereafter materially change the 

underlying products or services, NALs 

will automatically be rescinded when 

recipients change their product or 

service so that it no longer fits the 

description provided in the application 

and described in the NAL, unless the 

NAL recipient applies for and receives 

an amended NAL. These safeguards 

ensure that the programs are facilitating 

stakeholder participation, government 

accountability, and integrity on the part 

of NAL applicants.1

II. Background 

On September 10, 2019, the CFPB 

issued the ‘‘Policy on No-Action 

Letters.’’ 2 The Policy on No-Action 

Letters set forth how companies should 

submit No-Action Letter applications 

and how the CFPB would assess and 

issue No-Action Letters. Under the 

policy, the CFPB would grant No-Action 

Letters to individual companies, 

advising recipients that the agency 

would not make supervisory findings or 

bring a supervisory or enforcement 

action against the company with respect 

to certain matters. 

After conducting a review in 2022, the 

CFPB determined that the Policies failed 

to advance their stated objective of 

facilitating consumer-beneficial 

innovation.3 The CFPB also determined 

that the existing Policies failed to meet 

appropriate standards for transparency 

and stakeholder participation. The 

CFPB rescinded the policies and the 

CFPB continued to develop new 

protocols to ensure that such tools were 

consistent with the objectives of the 

Consumer Financial Protection Act and 

did not raise ethical concerns. 

As noted above, the CFPB 

experienced a number of potential 

abuses and challenges with the NAL 

policy that led to the decision to allow 

the prior policy to expire. For example, 

the CFPB granted Upstart Network a 

NAL in 2017,4 committing to not 

enforce the Equal Credit Opportunity 

Act (ECOA) against the company for 

their use of ‘‘artificial intelligence’’ in 

credit underwriting on behalf of bank 

partners. Despite the fact that other 

companies had similar models, Upstart 

became a leader in this market after 

receiving the NAL, and outside 

observers appear to have interpreted the 

NAL as an endorsement that Upstart’s 

model did not violate the ECOA.5 The 

CFPB extended that NAL in November 

2020.6 Immediately after the extension, 

Upstart closed its initial public offering 

and began trading its stock on the 

Nasdaq Global Select Market on 

December 16, 2020,7 with an initial 

market capitalization of $1.88 billion.8

In 2021, Upstart originated 1.3 million 

loans, totaling $11.8 billion, on behalf of 

bank partners. 

Around the same time as the IPO, 

several nonprofit organizations raised 

concerns about Upstart’s use of 

educational criteria (e.g. educational 

history, which university the applicant 

attended) in its lending model. Upstart 

agreed to appoint an independent 

monitor to determine whether Upstart’s 

model complied with the ECOA.9

Ultimately, the independent monitor 

ended the relationship after coming to 

an impasse with Upstart about how to 

assess compliance with ECOA.10

Notably, the monitor detected that the 

model caused ‘‘ ‘statistically and 

practically significant’ adverse 

approval/denial disparities for Black 

applicants.’’ 11

When Upstart wanted to substantially 

change its model, under the terms of the 

NAL, Upstart was supposed to apply for 

a modification of the NAL. Upstart 

applied for a modification, but the CFPB 

did not have enough time to review the 

implications of the significant changes. 

Upstart thus requested a termination of 

the NAL in order to be able to make the 

changes more quickly. The request was 

granted.12

The CFPB experienced similar 

challenges with its Sandbox Approval 

policy, which is being reissued 

simultaneously with this NAL policy. 

For example, the CFPB issued a 

Sandbox Approval Order for Payactiv, 

Inc., a paycheck advance lender. It did 

not grant an Approval to any other 

paycheck advance lender. The CFPB 

discovered evidence suggesting that 

Payactiv was using the approval in 

marketing materials to misrepresent that 

the CFPB endorsed Payactiv’s product. 

On June 3, 2022, the CFPB informed 

Payactiv that, for this reason, it was 


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1972 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 

13 In re December 30, 2020 Sandbox Approval 

Order, Order to Terminate Sandbox Approval Order 

(June 30, 2022), available at https://www.consumer

finance.gov/about-us/newsroom/cfpb-rescindsspecial-regulatory-treatment-for-payactiv/. 14 Id. 15 5 U.S.C. 603(a), 604(a). 16 12 U.S.C. 5511(a). 17 12 U.S.C. 5511(b)(3), (5). 18 12 U.S.C. 5481(12). 

19See 12 U.S.C. 5561 et seq. (enforcement 

authority); 12 U.S.C. 5531(a) (Unfair, Deceptive, or 

Abusive Acts or Practices (UDAAP) enforcement 

authority); 12 U.S.C. 5514, 5515 (supervision 

authority); 12 U.S.C. 5511(a) (‘‘The Bureau shall 

seek to implement and, where applicable, enforce 

Federal consumer financial law . . .’’) (emphasis 

added); 12 U.S.C. 5512(b)(1). 

considering terminating the approval 

order.13 Payactiv requested termination 

of the order, and the CFPB approved 

that termination request.14

To correct these shortcomings, the 

CFPB developed the Conditions to 

Promote Innovation, Competition, 

Ethics and Transparency that must be 

met for a Letter or Approval to be 

issued. They are incorporated in part A 

of the Policy on No-Action Letters that 

follows. 

III. Regulatory Requirements 

This Policy on No-Action Letters 

constitutes an agency general statement 

of policy and/or a rule of agency 

organization, procedure, or practice 

exempt from the notice and comment 

rulemaking requirements under the 

Administrative Procedure Act, pursuant 

to 5 U.S.C. 553(b). Because no notice of 

proposed rulemaking is required, the 

Regulatory Flexibility Act does not 

require an initial or final regulatory 

flexibility analysis.15 The CFPB has also 

determined that the issuance of the 

Bulletin does not impose any new or 

revise any existing recordkeeping, 

reporting, or disclosure requirements on 

covered entities or members of the 

public that would be collections of 

information requiring approval by the 

Office of Management and Budget under 

the Paperwork Reduction Act. 

IV. Policy Statement 

The text of the Policy is as follows: 

Policy on No-Action Letters 

In section 1021(a) of the Consumer 

Financial Protection Act (CFPA), 

Congress established the Consumer 

Financial Protection Bureau’s (CFPB’s) 

statutory purpose as ensuring that all 

consumers have access to markets for 

consumer financial products and 

services and that markets for consumer 

financial products and services are fair, 

transparent, and competitive.16

Relatedly, the CFPB’s objectives include 

exercising its authorities under Federal 

consumer financial law for the purposes 

of ensuring that markets for consumer 

financial products and services operate 

transparently and facilitate 

innovation.17

Congress has given the CFPB a variety 

of authorities under the CFPA and the 

enumerated consumer laws 18 that it can 

exercise to promote this purpose and 

these objectives. These authorities 

include supervision and enforcement 

authority, and the authority to issue 

orders and guidance.19 These 

authorities provide the basis for the 

Policy on No-Action Letters (Policy) and 

the No-Action Letters issued pursuant to 

the Policy. 

The primary purposes of the Policy 

are to provide a mechanism through 

which the CFPB may more effectively 

carry out its statutory purpose and 

objectives and to facilitate compliance 

with applicable Federal consumer 

financial laws. 

The Policy is not intended to, nor 

should it be construed to: 

a. restrict or limit in any way the 

CFPB’s discretion in exercising its 

authorities, including the provision of 

no-action or similar compliance 

assistance other than pursuant to the 

Policy; 

b. constitute an interpretation of law; 

or 

c. create or confer upon any covered 

person, consumer, or other external 

party any substantive or procedural 

rights, obligations, or defenses that are 

enforceable in any manner. 

In contrast, a particular No-Action 

Letter involves the CFPB’s exercise of its 

supervision and enforcement discretion 

in a particular manner. It cannot bind, 

and never could bind, state plaintiffs or 

plaintiffs in private actions, including 

but not limited to states prosecuting 

violations of federal consumer financial 

law under Section 1042 of the CFPA. 

The Policy consists of seven sections: 

• Section A describes the Conditions 

to Promote Innovation, Competition, 

Ethics and Transparency. 

• Section B describes the factors the 

CFPB intends to consider in assessing 

applications for a No-Action Letter. 

• Section C describes the standard 

procedures the CFPB intends to use in 

issuing No-Action Letters. 

• Section D describes the procedures 

the CFPB intends to use for 

modification and termination of NoAction Letters. 

• Section E describes how the CFPB 

intends to coordinate with other 

regulators with respect to No-Action 

Letters. 

• Section F describes the CFPB’s 

intentions relating to disclosure of 

information relating to No-Action 

Letters. 

A. Conditions To Promote Innovation, 

Competition, Ethics, and Transparency 

The following conditions apply to the 

No-Action Letter program: 

1. Applicants for No-Action Letters 

must establish a market problem, in the 

form of an unmet consumer need, that 

the new financial product or service 

solves. 

a. Applicants must articulate the 

benefit to consumers that flows from the 

CFPB permitting the product or service 

to be sold at market without compliance 

with the law at issue. 

b. A claim that a No-Action Letter 

would increase access to the applicant’s 

product or service is insufficient to 

establish a market problem. To satisfy 

this requirement, the applicant must 

prove that their product or service is 

meeting an untapped consumer need. 

2. The CFPB will not approve a NoAction Letter on a topic for a single 

firm. 

3. The CFPB will reach out to the 

applicant’s competitors and invite them 

to apply for a No-Action Letter on the 

same topic, to ensure that the CFPB 

does not select a single firm that gains 

a first-mover advantage in the market as 

a result. 

4. No-Action Letters will state that 

recipients may not market or promote 

the fact that their product or service 

received a Letter. Such marketing is 

inherently deceptive to consumers, 

creating the false impression that the 

CFPB endorses the product. 

5. The CFPB will post applications for 

a No-Action Letter to an open docket on 

the regulations.gov website and will 

accept comment for 60 days. In so 

doing, the CFPB will adhere to the 

confidentiality protections set forth in 

section F, below. 

6. The CFPB will generally not 

consider applications from former CFPB 

attorneys representing companies as 

outside counsel, to avoid ethical conflict 

and to maintain the highest integrity in 

the No-Action Letter program. 

7. The CFPB will not consider 

applications from companies that have 

been the subject of an enforcement 

action involving violations of Federal 

consumer financial law in the last 5 

years, or who are subject to a pending 

enforcement investigation by federal or 

state authorities. 

8. No-Action Letters will 

automatically be rescinded when 

recipients materially change their 

product or service so that it no longer 

fits the description provided in the 

application and described in the Letter, 

unless a modification is approved under 

Subpart D. 

9. Submitting No-Action Letter 

applications under false pretenses, or 


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20 18 U.S.C. 1001. 

21The decision whether to grant an application 

for a No-Action Letter will be within the CFPB’s 

sole discretion. 

22 If the CFPB decides to deny an application, it 

intends to inform the applicant of its decision. The 

CFPB intends to respond to reasonable requests to 

reconsider its denial of an application within 30 

days of such requests. Applicants may also 

withdraw, modify, and/or re-submit applications at 

any time before the application is granted. 

23For convenience, the term ‘‘recipient’’ is used 

in the Policy to refer both to an individual recipient 

and joint recipients. 

24For convenience, ‘‘described aspects of the 

product or service’’ is used in the Policy to capture 

the subject matter scope of a No-Action Letter, 

including both the particular aspects of the product 

or service in question, and the particular manner in 

which it is offered or provided. 

25 ‘‘Not performing as anticipated’’ includes the 

materialization of consumer risks identified in the 

application, and the materialization of other 

consumer risks not identified in the application. 

26 If an applicant objects to the disclosure of 

certain information and the CFPB insists that the 

information must be publicly disclosed if a NoAction Letter is issued, the applicant may withdraw 

the application and the CFPB intends to treat all 

information related to the application as 

confidential to the full extent permitted by law. 

27Such ground includes the materialization of 

consumer risks identified in the application, and 

the materialization of other consumer risks not 

identified in the application. 

with misleading or incomplete 

information, may be a violation of law 

and may be referred for potential 

prosecution.20

B. Assessment of Applications for NoAction Letters 

In deciding whether to grant an 

application for a No-Action Letter, the 

CFPB intends to balance a variety of 

factors, including an assessment of the 

quality and persuasiveness of the 

application; information about the 

applicant and the product or service in 

question derived through CFPB due 

diligence processes; the extent to which 

granting the application would be 

consistent with CFPB enforcement and 

supervision priorities; an assessment of 

litigation risk; and available CFPB 

resources.21

C. Procedures for Issuing No-Action 

Letters 

When the CFPB decides to grant an 

application for a No-Action Letter, it 

provides the recipients with a NoAction Letter signed by the Director that 

sets forth the specific terms and 

conditions of the No-Action Letter 

provided.22 The CFPB expects a NoAction Letter will: 

1. Identify the recipient; 23

2. Specify the subject matter scope of 

the letter, i.e., the described aspects of 

the product or service; 24

3. State that the letter: 

a. is limited to the recipient’s offering 

or providing the described aspects of the 

product or service, and does not apply 

to the recipient’s offering or providing 

different aspects of the product or 

service; 

b. is based on the factual 

representations made by the recipient, 

which may be incorporated by 

reference; 

c. does not purport to express any 

legal conclusions regarding the meaning 

or application of the laws and/or 

regulations within the scope of the 

letter; and 

d. does not constitute the CFPB’s 

endorsement of the product or service 

that is the subject of the letter, or any 

other product or service offered or 

provided by the recipient; 

e. expires in 2 years; 

4. Require the recipient to consent to 

the CFPB’s supervisory examination 

authority, if the recipient is not already 

subject to this authority; 

5. Require the recipient to apprise the 

CFPB of (a) material changes to 

information included in the application 

and (b) material information indicating 

that the described aspects of the product 

or service are not performing as 

anticipated in the application; 25

Pursuant to A.7, unless an applicant 

applies for an amendment pursuant to 

section D, No-Action Letters will 

automatically be rescinded when 

recipients change their product or 

service so that it no longer fits the 

description provided in the application 

and described in the Letter. 

6. Specify any other limitations or 

conditions, and be published on the 

CFPB’s website; 26

7. State that, unless or until the NoAction Letter expires or is terminated by 

the CFPB, the CFPB will not make 

supervisory findings or bring a 

supervisory or enforcement action 

against the recipient predicated on the 

recipient’s offering or providing the 

described aspects of the product or 

service under the laws identified in the 

No-Action Letter; 

8. State that, (i) the recipient may 

reasonably rely on any CFPB 

commitments made in the letter; (ii) the 

CFPB may terminate the letter if it 

determines that it is necessary or 

appropriate to do so to advance the 

primary purposes of the Policy, such as 

where the recipient fails to substantially 

comply in good faith with the terms and 

conditions of the letter; the described 

aspects of the product or service do not 

perform as anticipated in the 

application; 27 or controlling law 

changes as a result of a statutory change 

or a court decision that clearly permits 

or clearly prohibits conduct covered by 

the letter; and (iii) upon termination, the 

CFPB will not bring an action to impose 

retroactive liability with respect to 

conduct covered by the letter, except 

where a failure to substantially comply 

in good faith with the terms and 

conditions of the letter caused consumer 

harm or where the CFPB’s initial 

granting of the No-Action Letter failed 

to comply with the Administrative 

Procedure Act or other law. 

D. Procedures for Modification and 

Termination of No-Action Letters 

1. Modification Procedures 

A recipient of a No-Action Letter may 

apply for a modification of the letter. 

The recipient may seek modification to 

address an anticipated or unanticipated 

change in circumstances, such as 

iterations of the underlying product or 

service or changes to the information 

included in the No-Action Letter 

application. Applications for a 

modification should include the 

following: 

a. Any material changes to the 

information included in the original 

application; 

b. The specific requested 

modification(s) to the No-Action Letter; 

c. The ground(s) for modifying the 

No-Action Letter; and 

d. Any other information the recipient 

wishes to provide in support of the 

modification application. 

In deciding whether to grant an 

application for modification of a NoAction Letter, the CFPB intends to 

balance a variety of factors, including 

the quality and persuasiveness of the 

application. The CFPB expects to grant 

or deny such applications within 30 

days of notifying the applicant that the 

CFPB has deemed the application to be 

complete. When the CFPB grants an 

application for modification, it intends 

to provide the recipient with a modified 

No-Action Letter in accordance with the 

procedures specified in section C. 

2. Termination Procedures 

The CFPB intends that the recipient of 

a No-Action Letter should be able to 

reasonably rely on any CFPB 

commitments made in the letter. 

Before terminating a No-Action Letter, 

the CFPB may, in the appropriate cases, 

notify the recipient of the possible 

grounds for termination and permit an 

opportunity to respond within a 

reasonable period of time. In its 

discretion, the CFPB may offer the 

recipient an opportunity to modify its 

conduct to avoid termination. The CFPB 

may allow the recipient to wind-down 

the offering or providing of the 

described aspects of the product or 

service during a period of six months 


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1974 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 

28 12 U.S.C. 5495. 

29 12 U.S.C. 5552(c). 

30See, e.g., 12 U.S.C. 5512(c)(8). 

31 5 U.S.C. 552. 

32 12 CFR part 1070. 

33 12 CFR 1070.41. 

34 12 CFR 1070.2(f). 

35 5 U.S.C. 552(b)(4). 

36 12 CFR 1070.20(a), (b). 

37The CFPB intends to publish denials only after 

the applicant is given an opportunity to request 

reconsideration of the denial. Upon request, and if 

disclosure is not required by 5 U.S.C. 552(a)(2) or 

other applicable law, the CFPB does not intend to 

release identifying information from published 

denials, and to instead redact such information 

from denials published on its website. 

38See Food Mktg. Inst. v. Argus Leader Media, 

139 S. Ct. 2356 (June 24, 2019). 

39To the extent associated communications 

include the same information, that information 

would have the same status. But other information 

in associated communications may be subject to 

disclosure. 

40See, e.g., 12 U.S.C. 5512(c)(8). 

before termination, unless the described 

aspects of the product or service are 

causing injury to consumers, and a 

wind-down period would permit such 

injury to continue. If the CFPB 

terminates a No-Action Letter, it will do 

so in writing and specify the reasons for 

its decision. The CFPB will publish 

termination decisions on its website. 

E. Regulatory Coordination 

Section 1015 of the CFPA instructs 

the CFPB to coordinate with Federal 

agencies and State regulators, as 

appropriate, to promote consistent 

regulatory treatment of consumer 

financial and investment products and 

services.28 Similarly, section 1042(c) of 

the CFPA instructs the CFPB to provide 

guidance in order to further coordinate 

actions with the State attorneys general 

and other regulators.29 Such 

coordination includes coordinating in 

circumstances where other regulators 

have chosen to limit their enforcement 

or other regulatory authority. The CFPB 

is interested in entering into agreements 

with State authorities that issue similar 

forms of no-action compliance 

assistance that would provide for an 

alternative means of receiving a NoAction Letter from the CFPB, i.e., 

alternative to the process described in 

sections A through D. 

Furthermore, the CFPB is interested 

in coordinating with other regulators 

more generally. To this end, the CFPB 

intends to enter into agreements 

whenever practicable to coordinate NoAction Letters issued under the Policy 

with similar forms of compliance 

assistance offered by State, Federal, or 

international regulators. 

F. CFPB Disclosure of Information 

Regarding No-Action Letters 

Public disclosure of information 

regarding No-Action Letters is governed 

by applicable law, including the 

CFPA,30 the Freedom of Information Act 

(FOIA),31 and the CFPB’s Rule on 

Disclosure of Records and Information 

(Disclosure Rule).32 The Disclosure Rule 

generally prohibits the CFPB from 

disclosing confidential information,33

and defines confidential information to 

include information that may be exempt 

from disclosure under the FOIA 34— 

including FOIA Exemption 4 regarding 

trade secrets and confidential 

commercial or financial information 

that is privileged or confidential.35

Relatedly, the Disclosure Rule defines 

business information as commercial or 

financial information obtained by the 

CFPB from a submitter that may be 

protected from disclosure under FOIA 

Exemption 4, and generally provides 

that such business information shall not 

be disclosed pursuant to a FOIA request 

except in accordance with section 

1070.20 of the rule.36

Consistent with applicable law, the 

CFPB will publish No-Action Letters on 

its website, as well as the application 

previously published on 

regulations.gov. The CFPB also may 

publish denials of applications on its 

website, including an explanation of 

why the application was denied, 

particularly if it determines that doing 

so would be in the public interest.37

Where information submitted to the 

CFPB is both customarily and actually 

treated as private by the submitter, the 

CFPB intends to treat it as confidential 

in accordance with the Disclosure 

Rule.38 The CFPB anticipates that much 

of the information submitted by 

applicants in their applications, and by 

recipients during the pendency of the 

No-Action Letter, will qualify as 

confidential information under the 

Disclosure Rule.39

Disclosure of information or data 

provided to the CFPB under the Policy 

to other Federal and State agencies is 

governed by applicable law, including 

the CFPA 40 and the Disclosure Rule. 

To the extent the CFPB wishes to 

publicly disclose non-confidential 

information regarding a No-Action 

Letter, the CFPB intends to include the 

terms of such disclosure in the letter. 

The CFPB intends to draft the NoAction Letter in a manner such that 

confidential information is not 

disclosed. Consistent with applicable 

law and its own rules, the CFPB does 

not intend to publicly disclose any 

information that would conflict with 

consumers’ privacy interests. 

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2025–00378 Filed 1–8–25; 8:45 am] 

BILLING CODE 4810–AM–P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

Policy Statement on Compliance 

Assistance Sandbox Approvals 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Policy statement. 

SUMMARY: The Consumer Financial 

Protection Bureau (CFPB) is issuing this 

policy statement on Compliance 

Assistance Sandbox (Policy), which is 

intended to further objectives under 

Section 1021 of the Consumer Financial 

Protection Act. 

DATES: This policy statement is 

applicable on January 10, 2025. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Regulatory 

Implementation & Guidance Program 

Analyst, Office of Regulations, at 202– 

435–7700 or at: https://reginquiries.

consumerfinance.gov/. If you require 

this document in an alternative 

electronic format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Overview 

The CFPB is accepting applications 

for Compliance Assistance Sandbox 

Approvals (‘‘Approvals’’), as set forth in 

the policy statement below and subject 

to Conditions to Promote Innovation, 

Competition, Ethics and Transparency 

(‘‘the Conditions’’). The Conditions 

would be incorporated into individual 

Approvals and serve several purposes. 

To summarize the Conditions, they 

are first designed to ensure that 

Approvals promote innovations that 

solve unmet needs in markets for 

consumer financial products and 

services. Minor adjustments to existing 

products, or products that are designed 

to take advantage of gaps in laws rather 

than bringing new offerings to market, 

do not confer significant enough benefit 

on consumers to warrant the 

expenditure of government resources 

necessary to issue and monitor 

Approvals. Granting Approvals in such 

circumstances misallocates government 

resources towards advantaging slight 

variations of what is essentially the 

same product that is currently available 

in the market. The Conditions therefore 


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