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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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%20

letter%20to%20Upstart.pdf; Fair Lending 

Monitorship of Upstart Network’s Lending Model 

(Mar. 27, 2023) (identifying ‘‘approval disparities 

for Black applicants’’), available at 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, https://www.relmanlaw.com/assets/ 

htmldocuments/Upstart%20Final%20Report.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. 

aim to enable innovations that solve real 

problems that consumers face in 

financial markets. 

Second, the Conditions ensure that 

Approvals do not compromise the 

competitive process. Innovation is 

maximized by competitive, open 

markets and robust rivalry among firms. 

In seeking to promote innovation, the 

Approvals 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 

Approval topic. The CFPB will not grant 

an Approval 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 an Approval, 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 Approvals 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 

Approvals, 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, 

Approvals will not be granted to firms 

that have been the subject of an 

enforcement action involving prior 

violations of federal consumer financial 

law in the last five years. And to prevent 

bait-and-switch negotiation tactics 

experience under the prior Sandbox 

policy, where firms negotiated terms of 

Approvals with the CFPB and thereafter 

materially change the underlying 

products or services, Approvals 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 Approval, unless 

the Approval recipient applies for and 

receives an amended Approval. These 

safeguards ensure that the programs are 

facilitating stakeholder participation, 

government accountability, and 

integrity on the part of Approval 

applicants.1

II. Background 

On September 10, 2019, the CFPB 

issued the ‘‘Policy on the Compliance 

Assistance Sandbox.’’ 2 The Policy on 

the Compliance Assistance Sandbox sets 

forth how the CFPB would grant a 

company immunity from liability under 

one or more of three safe harbor 

provisions and provide an Approval 

concluding that the offering or 

providing of certain aspects of an 

individual company’s product or service 

complies with the relevant Federal 

consumer financial law. 

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 CAS 

policy, and with the NAL policy that is 

being reissued simultaneously with this 

policy, that led to the decision to allow 

the prior policies 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. 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 


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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). 

18See 12 U.S.C. 5481(12) (listing the enumerated 

consumer laws). 

19 15 U.S.C. 1640(f) (TILA); 15 U.S.C. 1691e(e) 

(ECOA); 15 U.S.C. 1693m(d) (EFTA). 

20For convenience, the Policy uses the term 

‘‘described aspects of the product or service’’ to 

refer to the subject matter scope of a particular form 

of compliance assistance, including both the 

particular aspects of the product or service in 

question and the particular manner in which it is 

offered or provided. If a Sandbox applicant seeks 

more than one form of assistance under the Policy 

(for example, an approval under one statute and an 

approval under another statute), it is possible that 

these different forms may relate to different 

described aspects of the same product or service. If 

so, in order to enable the CFPB to respond 

expeditiously to the application, the applicant 

should make its best efforts to specify the described 

aspects that relate to each form sought. The CFPB 

recognizes that in some cases it may be difficult to 

determine precisely which aspects of a product or 

service implicate different legal provisions, 

particularly for applicants that lack the legal 

resources for a fully precise determination. In such 

circumstances, the applicant should provide the 

maximum specification practicable under the 

circumstances and explain the limits on further 

specification. 

21See 15 U.S.C. 1640(f); 15 U.S.C. 1691e(e); 15 

U.S.C. 1693m(d). 

the CFPB endorsed Payactiv’s product. 

On June 3, 2022, the CFPB informed 

Payactiv that, for this reason, it was 

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 B 

of the Policy on Sandbox Compliance 

Assistance Sandbox that follows. 

III. Regulatory Requirements 

This Policy on the Compliance 

Assistance Sandbox 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 the Compliance Assistance 

Sandbox 

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. These authorities 

provide the basis for the Policy on the 

Compliance Assistance Sandbox (CAS 

Policy or Policy) and the Approvals 

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 

compliance assistance other than 

pursuant to the Policy; 

b. constitute an interpretation of law, 

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 Approval 

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 enforcing 

violations of federal consumer financial 

law under Section 1042 of the CFPA. 

The Policy consists of seven sections: 

• Section A describes the compliance 

assistance available under the Policy; 

• Section B describes the Conditions 

to Promote Innovation, Competition, 

Ethics, and Transparency; 

• Section C describes factors the 

CFPB intends to consider in deciding 

whether to grant an application for 

compliance assistance; 

• Section D describes the standard 

procedures the CFPB intends to use in 

providing compliance assistance; 

• Section E describes procedures the 

CFPB intends to use for granting 

extensions of, modifying, and 

terminating compliance assistance; 

• Section F describes how the CFPB 

intends to coordinate with other 

regulators with respect to compliance 

assistance; and 

• Section G describes the CFPB’s 

intentions regarding disclosure of 

information relating to approvals. 

A. Compliance Assistance Approvals 

An Approval is provided by the CFPB 

to a particular entity under one or more 

of three statutory safe harbor provisions, 

based on the application of existing law 

to particular facts and circumstances.19

An Approval issued to a particular 

entity will state that, subject to good 

faith compliance with specified terms 

and conditions, the CFPB concludes for 

the reasons stated therein that offering 

or providing the described aspects of the 

product or service complies with the 

Federal consumer financial law 

identified therein.20 By operation of the 

applicable statutory provision, the 

recipient has a safe harbor from liability 

under the relevant statute, to the fullest 

extent permitted by these provisions, as 

to any act done or omitted in good faith 

in conformity with the Approval.21

B. Conditions To Promote Innovation, 

Competition, Ethics, and Transparency 

The following conditions apply to the 

Compliance Assistance Sandbox 

program: 

1. Applicants for CAS Approvals 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 with a safe harbor 

from liability under the law at issue. 

(b) A claim that a CAS Approval 

would increase access to the applicant’s 

product or service is insufficient to 

establish a market problem. To satisfy 


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22 18 U.S.C. 1001. 

23These procedures may be modified based on 

coordination efforts with other regulators, as 

specified in section F. 

24 If the CFPB decides to deny an application, it 

will inform the applicant of its decision. The CFPB 

intends to respond to reasonable requests to 

reconsider its denial of an application within 60 

days of such requests. Applicants may withdraw, 

modify, and re-submit applications at any time. 

25 If these vary by the form of assistance sought, 

the document will specify the relevant aspects 

separately. 

26 ‘‘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. 

27CFPA actionable substantial injury, as used in 

this Policy, means substantial injury that is not 

reasonably avoidable by the consumer, where such 

substantial injury is not outweighed by 

countervailing benefits to consumers or 

competition. See 12 U.S.C. 5531(c); see also 12 

U.S.C. 5536(a)(1)(B). 

28The CFPB expects two years to be an 

appropriate duration for approvals in most cases, 

but recipients may apply for extensions. See section 

E.1. 

29 If an applicant objects to the disclosure of 

certain information and the CFPB insists that the 

information must be publicly disclosed for 

compliance assistance to be provided, 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. 

30As noted in section A.1, the safe harbor 

associated with an approval only applies to acts 

done or omitted in good faith in conformity with 

the approval, and the approval will so state. 

31No retroactive action premised on the 

described aspects of the product or service will lie 

under provisions covered by an approval. Actions 

that are not premised on the described aspects of 

the product or service associated with a particular 

approval are, by definition, not subject to any such 

restriction. 

this requirement, the applicant must 

prove that their product or service is 

meeting an untapped consumer need. 

2. The CFPB will not grant a CAS 

Approval 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 CAS Approval 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. CAS Approvals will state that 

recipients may not market or promote 

the fact that their product or service 

received an Approval. 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 CAS Approval 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 G, below. 

6. The CFPB will generally not 

consider applications from companies 

that are represented by former CFPB 

attorneys as outside counsel, to avoid 

ethical conflict and to maintain the 

highest integrity in the CAS Approval 

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. CAS Approvals 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 

Approval, unless a modification is 

approved under Subpart E. 

9. Submitting CAS Approval 

applications under false pretenses, or 

with misleading or incomplete 

information, may be a violation of law 

and may be referred for potential 

prosecution.22

C. Assessment of Applications for 

Compliance Assistance 

The CFPB may grant or deny a 

compliance assistance application in its 

sole discretion. If it chooses to grant an 

application, the CFPB also has 

discretion to grant the application in 

whole or only in part. In deciding 

whether to grant an application for 

compliance assistance, the CFPB 

intends to balance a variety of factors in 

considering the quality and 

persuasiveness of the application, as 

well as information about the applicant 

and the product or service in question 

derived through CFPB due diligence 

processes. 

D. Procedures for Providing Compliance 

Assistance 23

When the CFPB decides to grant an 

application for compliance assistance, it 

intends to provide the recipient with a 

Compliance Assistance Statement of 

Terms (CAST) setting forth the terms 

under which compliance assistance is 

provided, including the types and scope 

of assistance provided to the recipient. 

The CAST will be signed by the 

Director, and by an officer of the 

recipient.24 The CFPB expects that the 

CAST will: 

1. Identify the recipient; 

2. Specify the subject matter scope of 

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

the product or service; 25

3. State that the CAST and the 

compliance assistance provided: 

(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 constitute the CFPB’s 

endorsement of the product or service 

that is the subject of the CAST, or any 

other product or service offered or 

provided by the recipient; and 

(d) 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 inform 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; 26

Pursuant to B.7, unless an applicant 

applies for an amendment pursuant to 

section E, CAS Approvals 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 Approval; 

6. Require the recipient to report 

information about the effects of offering 

or providing the described aspects of the 

product or service, including with 

respect to complaint patterns, default 

rates, or similar metrics that will enable 

the CFPB to identify material increase in 

any risk of injury to consumers; 

7. Where appropriate, include a 

commitment by the recipient to 

compensate consumers for CFPA 

actionable substantial injury caused by 

the recipient’s offering or providing the 

described aspects of the product or 

service; 27

8. Specify any other limitations or 

conditions, such as the duration of the 

compliance assistance,28 the nature and 

extent of the recipient’s data-sharing, 

and the extent to which the CFPB 

intends to publicly disclose information 

about the recipient’s participation; 29

9. With respect to any approval the 

CFPB is providing the recipient: (a) state 

that, subject to good faith compliance 

with the CAST, the CFPB approves the 

recipient’s offering or providing the 

described aspects of the product or 

service under the relevant law identified 

therein; 30 and (b) explain the CFPB’s 

basis for issuing the Approval; 

10. State that: (a) the recipient may 

reasonably rely on any CFPB 

commitments made in the CAST unless 

or until the Approval expires or is 

terminated by the CFPB; and (b) the 

CFPB may terminate 31 any approval 


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1978 Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 

32Such ground includes the materialization of 

consumer risks identified in the application, or the 

materialization of other consumer risks not 

identified in the application. 

33 If the CFPB is providing a No-Action Letter to 

the recipient, any termination of the No-Action 

Letter will be in accordance with the NAL Policy. 

34Assuming the two-year period the CFPB 

expects to be appropriate in most cases, the CFPB 

believes recipients would have sufficient time to 

gather evidence supportive of an extension request. 

For periods of one year or less, the CFPB may 

consider an extension deadline appropriate for the 

period in question. 

35The CFPB’s plans regarding rulemaking activity 

are set forth in its Semiannual Regulatory Agenda, 

published in full on www.reginfo.gov. If the period 

of an extension were tied to the CFPB’s 

consideration of amending relevant regulatory 

provisions and the CFPB announced it was 

discontinuing its plans to amend the provisions in 

question, the extension period would be adjusted 

accordingly, e.g., to end on a specific date. 

37 12 U.S.C. 5495. 

38 12 U.S.C. 5552(c). 

described in the CAST if: (i) the 

recipient fails to substantially comply in 

good faith with the specified terms and 

conditions of the CAST; (ii) the 

described aspects of the product or 

service do not perform as anticipated in 

the application; 32 or (iii) a statutory 

change or Federal judicial holding 

causes the CFPB to conclude that the 

recipient can no longer rely in good 

faith on the CFPB’s approval as the safe 

harbor provisions require; and 

11. If the applicant also applied for a 

No-Action Letter using their application 

under the CAS Policy for compliance 

assistance, incorporate any No-Action 

Letter that the CFPB is issuing pursuant 

to the terms of the NAL Policy.33

E. Procedures for Extension, 

Modification, and Termination 

1. Extension Procedures 

Recipients of compliance assistance 

may apply for an extension of a 

specified period of time. In considering 

applications for extensions, the CFPB 

expects to place particular weight on the 

extent to which the data provided to the 

CFPB under the terms of the CAST 

shows that the described aspects of the 

product or service are benefitting 

consumers, not causing unanticipated 

harms, and not materially increasing the 

risk of substantial injury. Such 

applications for an extension should 

include the proposed duration of the 

extension and should be submitted no 

later than 90 days prior to the expiration 

of the compliance assistance under the 

terms of the CAST.34 The recipient 

should explain the reasons for the 

requested extension, such as whether it 

is intended to last until a possible 

amendment to CFPB regulations or the 

Commentary, or is instead intended for 

more particularized compliance 

assistance purposes. 

Upon the presentation of persuasive 

data, the CFPB anticipates granting such 

extension applications for a period at 

least as long as the period of the 

applicant’s original receipt of assistance. 

The CFPB anticipates permitting longer 

extensions where the CFPB is 

considering amending applicable 

regulatory requirements or the relevant 

Commentary.35 During the time period 

pending a rule or Commentary 

amendment, the CFPB intends to 

consider means of providing similar 

assistance to other covered entities that 

engage in the same or similar conduct 

in offering or providing comparable 

products. 

2. Modification Procedures 

A recipient of compliance assistance 

may apply for a modification of the 

CAST. 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 application for assistance. 

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 

to the CAST; 

c. The grounds for modifying the 

CAST; 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, 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 CAST in 

accordance with the procedures 

specified in Section D. 

3. Termination Procedures 

The CFPB intends that the recipient of 

compliance assistance should be able to 

reasonably rely on any CFPB 

commitments made in the associated 

CAST. 

The CFPB expects that a CAST will 

state that: (a) the recipient may 

reasonably rely on any CFPB 

commitments made in the CAST; and 

(b) the CFPB may terminate any 

approval described in the CAST if: (i) 

the recipient fails to substantially 

comply in good faith with the specified 

terms and conditions of the CAST; (ii) 

the described aspects of the product or 

service do not perform as anticipated in 

the application; 36 or (iii) a statutory 

amendment or federal judicial holding 

causes the CFPB to conclude that the 

recipient can no longer rely in good 

faith on the CFPB’s approval as the safe 

harbor provisions require. By operation 

of law, no retroactive action premised 

on the described aspects of the product 

or service will lie under provisions 

within the scope of an approval, except 

where a failure to substantially comply 

in good faith with the terms of the 

Approval caused consumer harm or 

where the CFPB’s initial granting of the 

Approval failed to comply with the 

Administrative Procedure Act or other 

law. If the CFPB is also providing a NoAction Letter to the recipient, 

termination will be in accordance with 

the NAL Policy. 

Before terminating any approval 

provided under the Policy, 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 

before termination is effective, 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 any approval provided under 

this Policy, it will do so in writing and 

specify the reasons for its decision. The 

CFPB will publish termination 

decisions on its website. 

F. 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.37 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.38 Such 

coordination includes coordinating in 

circumstances where other regulators 

have chosen to offer assistance to 

entities offering innovative products 

and services. One method of providing 

such assistance is through a State 

sandbox, or group of State sandboxes, or 

other limited scope State authorization 


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Federal Register / Vol. 90, No. 6 / Friday, January 10, 2025 / Notices 1979 

39The concept of a regulatory sandbox is 

relatively new and does not have a precise, 

generally accepted definition. The term is used in 

this Policy to refer to a regulatory structure where 

a participant obtains limited or temporary access to 

a market in exchange for reduced regulatory 

uncertainty or other regulatory barriers to entry. 

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

41 5 U.S.C. 552. 

42 12 CFR part 1070. 

43 12 CFR 1070.41. 

44 12 CFR 1070.2(f). 

45 5 U.S.C. 552(b)(4). 

46 12 CFR 1070.20(a), (b). 

47When a regulated entity receives an approval 

in a coordinated manner with assistance under a 

State sandbox, the CFPB may be restricted in its 

discretion to further disclose information obtained 

from the relevant State authority. Nonetheless, the 

CFPB anticipates that all the disclosures identified 

above would be made with respect to any approval 

provided by the CFPB under this Policy. 

48The 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 intends to redact 

identifying information from denials published on 

its website. 

49See Food Marketing Institute v. Argus Leader 

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

50To 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. 

51See, e.g., 12 U.S.C. 5512(c)(8). 

program (State sandbox).39 The CFPB is 

interested in entering into agreements 

with State authorities that operate or 

plan to operate a State sandbox, which 

may include a process to receive 

compliance assistance under this Policy 

in a coordinated manner with assistance 

from the State sandbox. 

Furthermore, the CFPB is interested 

in coordinating with other regulators 

more generally regarding this Policy. To 

this end, the CFPB intends to enter into 

agreements whenever practicable to 

coordinate compliance assistance under 

the Policy with assistance offered by 

State, Federal, or international 

regulators. 

G. Disclosure of Information Relating to 

Approvals 

Public disclosure of information 

regarding approvals under this Policy is 

governed by applicable law, including 

the CFPA,40 the Freedom of Information 

Act (FOIA),41 and the CFPB’s Rule on 

Disclosure of Records and Information 

(Disclosure Rule).42 The Disclosure Rule 

generally prohibits the CFPB from 

disclosing confidential information,43

and defines confidential information to 

include information that may be exempt 

from disclosure under the FOIA 44— 

including Exemption 4 regarding trade 

secrets and confidential commercial or 

financial information that is privileged 

or confidential.45 The Disclosure Rule 

also defines business information as 

commercial or financial information 

obtained by the CFPB from a submitter 

that may be protected from disclosure 

under Exemption 4 of FOIA, 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.46

Consistent with applicable law, the 

CFPB will publish on its website its 

final disposition of applications for 

approvals, as well as the application 

previously published on 

regulations.gov. If the CFPB decides to 

grant an application, it intends to 

publish an order regarding the decision 

on its website as soon as practicable. 

The CFPB expects that the order will 

overlap with the CAST provided to the 

recipient, but will contain other 

information and will not include 

information protected from public 

disclosure under applicable law. The 

CFPB expects the order to include: (i) 

the identity of the recipient; (ii) the 

described aspects of the product or 

service to which the approval applies; 

(iii) the approval’s specified duration, 

basis, and legal authority; and (iv) in 

appropriate cases, a version of the 

summary of the application.47 The 

CFPB also intends to publish denials of 

applications on its website, including an 

explanation of why the application was 

denied in whole or in part.48

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.49 The CFPB anticipates that much 

of the information submitted by 

applicants in their applications, and by 

recipients while operating pursuant to a 

CAST, will qualify as confidential 

information under the Disclosure 

Rule.50

Disclosure to other Federal and State 

agencies of information or data provided 

to the CFPB under the Policy is 

governed by applicable law, including 

the CFPA 51 and the Disclosure Rule. 

To the extent the CFPB wishes to 

publicly disclose non-confidential 

information regarding approvals, the 

CFPB intends to include the terms of 

such disclosure in the CAST. The CFPB 

intends to draft the CAST 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. 2025–00377 Filed 1–8–25; 8:45 am] 

BILLING CODE 4810–AM–P 

DEPARTMENT OF DEFENSE 

Department of the Air Force 

[Docket ID: USAF–2024–HQ–0010] 

Submission for OMB Review; 

Comment Request 

AGENCY: Department of the Air Force, 

Department of Defense (DoD). 

ACTION: 30-Day information collection 

notice. 

SUMMARY: The DoD has submitted to the 

Office of Management and Budget 

(OMB) for clearance the following 

proposal for collection of information 

under the provisions of the Paperwork 

Reduction Act. 

DATES: Consideration will be given to all 

comments received by February 10, 

2025. 

ADDRESSES: Written comments and 

recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to www.reginfo.gov/public/do/ 

PRAMain. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

FOR FURTHER INFORMATION CONTACT: 

Reginald Lucas, (571) 372–7574, 

whs.mc-alex.esd.mbx.dd-dodinformation-collections@mail.mil. 

SUPPLEMENTARY INFORMATION: 

Title; Associated Form; and OMB 

Number: Web-based Legal Information 

Online System (WebLIONS); OMB 

Control Number 0701–0161. 

Type of Request: Revision. 

Number of Respondents: 194,000. 

Responses per Respondent: 1. 

Annual Responses: 194,000. 

Average Burden per Response: 3 

minutes. 

Annual Burden Hours: 9,700. 

Needs and Uses: The information 

collection requirement is necessary to 

obtain personal identifiable information 

to provide efficient and competent legal 

assistance to individuals with personal 

civil legal issues. Legal assistance 

records assist Air Force attorneys with 

tracking and managing cases, 

performing conflict checks, and 

generating legal documents for clients. 


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