[Federal Register Volume 81, Number 34 (Monday, February 22, 2016)]
[Notices]
[Pages 8686-8695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02390]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

[Docket No. CFPB-2014-0025]


Policy on No-Action Letters; Information Collection

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final Policy Statement.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
issuing a final policy statement on No-Action Letters (Policy), which 
is intended to further objectives under section 1021 of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank 
Act).

DATES: The Bureau released this Policy Statement on its Web site on 
February 18, 2016.

FOR FURTHER INFORMATION CONTACT: Dan Quan, Senior Advisor to the 
Director, Consumer Financial Protection Bureau, at (202) 435-7678.

SUPPLEMENTARY INFORMATION:

I. Overview

    In specifying the purposes, objectives, and functions of the Bureau 
in section 1021 of the Dodd-Frank Act, Congress authorized the Bureau 
to exercise its authorities for the purpose of ensuring that markets 
for consumer financial products and services operate transparently and 
efficiently to facilitate access and innovation.\1\ Pursuant to its 
authority, the Bureau is finalizing the Policy that is set forth in 
section VI below. Under the Policy, Bureau staff would, in its 
discretion, issue no-action letters (NALs) to specific applicants in 
instances involving innovative financial products or services that 
promise substantial consumer benefit where there is substantial 
uncertainty whether or how specific provisions of statutes implemented 
or regulations issued by the Bureau would be applied (for example if, 
because of intervening technological developments, the application of 
statutes and regulations to a new product is novel and complicated). 
The Policy is also designed to enhance compliance with applicable 
federal consumer financial laws. A NAL would advise the recipient that, 
subject to its stated limitations, the staff has no present intention 
to recommend initiation of an enforcement or supervisory action against 
the requester with respect to a specified matter. NALs would be subject 
to modification or revocation at any time at the discretion of the 
staff, and may be conditioned on particular undertakings by the 
applicant with respect to product or service usage and data-sharing 
with the Bureau. Issued NALs generally would be publicly disclosed. 
NALs would be non-binding on the Bureau, and would not bind courts or 
other actors who might challenge a NAL-

[[Page 8687]]

recipient's product or service, such as other regulators or parties in 
litigation. The Bureau believes that there may be significant 
opportunities to facilitate innovation and access, and otherwise 
substantially enhance consumer benefits, through the Policy.
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    \1\ Section 1022(b)(1) of the Dodd-Frank Act authorizes the 
Director to prescribe rules and issue orders and guidance, as may be 
necessary or appropriate to enable the Bureau to administer and 
carry out the purposes and objectives of the Federal consumer 
financial laws, and to prevent evasions thereof. 12 U.S.C. 
5512(b)(1).
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II. Overview of Public Comments

    On October 16, 2014, the Bureau published in the Federal Register a 
notice inviting the general public and other Federal agencies to 
comment on any aspect of its proposed Policy on No-Action Letters 
(Proposed Policy).\2\ The Bureau received 28 formal comments on the 
Proposed Policy. Industry trade associations and other industry-
oriented groups submitted 16 comment letters. Financial services 
providers submitted 3 comment letters. There were 3 comment letters 
from consumer-oriented groups. Individuals submitted a further 6 
comments.
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    \2\ 79 FR 62118 (Oct. 16, 2014).
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    Virtually all commenters supported the stated goals of the Proposed 
Policy, to reduce regulatory uncertainty and facilitate innovation. No 
commenter disputed the Bureau's legal authority to adopt the Proposed 
Policy. Most comments asked for clarification or further detailing 
around specific parts of the Proposed Policy. Some urged changes to the 
Proposed Policy, for example, to make NALs more available to providers 
of consumer financial products and services with less burden or fewer 
restrictions or, in the case of some consumer-oriented commenters, to 
provide for additional consumer protections. Many commenters also urged 
the Bureau to make modifications to address concerns about the 
disclosure of proprietary business information and trade secrets. One 
industry trade association urged the Bureau to abandon the Proposed 
Policy because the organization considered that, as proposed, it would 
not facilitate and improve compliance in a meaningful way.

III. Summary of Comments, Bureau Response, and Resulting Policy Changes

    This section provides a summary of the principal comments received 
by subject matter. It also summarizes the Bureau's assessment of the 
comments by subject matter and, where applicable, describes the 
resulting changes that the Bureau is making in the final Policy. The 
Bureau has made some changes in response to comments received and to 
provide additional clarity, but in substantial part follows the 
Proposal.
    While addressing discrete issues, commenters also expressed more 
general concerns that the criteria in the Proposed Policy were 
unworkable or that entities were unlikely to receive NALs. The Bureau 
believes the Policy will facilitate innovation and otherwise 
substantially enhance consumer benefits. However, the Bureau plans to 
monitor the effectiveness of the Policy and to assess periodically 
whether changes to the Policy would better effectuate these purposes.

A. Types of Guidance

    Several industry trade groups urged the Bureau to adopt a policy 
for providing definitive regulatory interpretations to industry 
participants, such as in the form of Bureau interpretive rules and 
letters and advisory opinions, in addition to adopting a policy for 
issuing NALs. These commenters generally argued that guidance of this 
character would be useful to provide needed clarity regarding matters 
of potential regulatory uncertainty, and to facilitate compliance, and 
could address broader topics than may be presented in the context of a 
particular NAL. Some of these commenters anticipated that industry 
members would seek Bureau interpretive letters in circumstances in 
which applying for a NAL would be especially burdensome, or in 
circumstances that did not involve a product that would meet the 
parameters of the proposed NAL policy (such as a product already well-
established in the marketplace). Various commenters stated that it is 
important for industry that the Bureau issue types of guidance that are 
legally binding, on the Bureau as well as (subject to judicial review) 
on other regulators and on consumer challengers, in addition to NALs, 
which provide only non-binding staff guidance.
    The Bureau is committed to devoting substantial efforts to 
improving regulatory clarity and transparency to consumers, industry, 
and other stakeholders. The Bureau provides extensive interpretive 
guidance regarding regulations it has issued to govern the provision of 
consumer financial products and services, in a variety of ways. Many of 
the Bureau's regulations are accompanied by official Bureau 
interpretations, specifically keyed to the regulations by section 
number and published in the Code of Federal Regulations, that provide 
detail regarding interpretation and application of the regulations. 
Prior to promulgation of rules, Bureau staff has undertaken broad 
industry outreach to identify areas of potential uncertainty and to 
ascertain key matters of concern to industry regarding implementation 
and compliance. In many cases, such official interpretations are 
promulgated through notice and comment, simultaneously with issuance of 
the regulations. The Bureau actively monitors these official 
interpretations, and it has issued revisions of these official 
interpretations, in light of industry needs and other developments, on 
multiple occasions. In other instances, apart from official Bureau 
interpretations published in the Code of Federal Regulations, the 
Bureau has issued official interpretations or regulatory guidance on a 
stand-alone basis.
    The Bureau has taken a number of steps to support industry 
implementation of its regulations and provide guidance to help 
financial institutions and other stakeholders understand, 
operationalize, and comply with new consumer protections. The Bureau 
has engaged directly and intensively with financial institutions, 
vendors, and others through a regulatory implementation project. As 
part of this effort, the Bureau has published plain-language guides and 
other resources, such as compliance guides, sample forms, fact sheets, 
rule summaries, charts, and toolkits. The Bureau has also published 
readiness guides that include check-lists of things for industry to do 
prior to a rule's effective date, such as updating policies and 
procedures and providing training for staff. In addition, the Bureau 
has conducted free webinars, available for public viewing through the 
Bureau's Web site, that provide guidance on how to interpret and apply 
its rules. These resources are available on the Bureau's Web site at 
www.consumerfinance.gov/regulatory-implementation.
    The Bureau also provides unofficial oral staff guidance in response 
to regulatory interpretive questions that financial institutions and 
others subject to the Bureau's regulations can submit on an ongoing 
basis through a dedicated email address. The Bureau has provided 
unofficial oral guidance in response to thousands of such requests. In 
addition, Bureau regulatory staff has undertaken extensive post-
issuance outreach to identify problem areas and provide further oral 
and written guidance about its regulations, on a timely basis.\3\

[[Page 8688]]

Bureau staff regularly meets with industry representatives and other 
stakeholders regarding all areas within its regulatory jurisdiction to 
identify areas of regulatory uncertainty or compliance challenges, and 
to formulate an appropriate response when necessary. For example, the 
Bureau has published additional official commentary in response to 
feedback from stakeholders, including industry. Bureau staff has also 
provided remarks and addressed questions about Bureau rules and related 
implementation matters at numerous formal events and informal 
stakeholder meetings.
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    \3\ For example, the Bureau has provided substantial guidance 
relating to implementation of the Know Before You Owe/TILA-RESPA 
Integrated Disclosure rule, including a compliance guide, a guide to 
forms, a closing factsheet, a disclosure timeline, integrated loan 
disclosure forms and samples, and webinars. Many of these materials 
are made available on the Internet at http://www.consumerfinance.gov/regulatory-implementation/tila-respa.
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    Moreover, the Bureau has published an array of bulletins to further 
clarify regulatory obligations and enhance compliance where industry 
has advised the Bureau of interpretive or other concerns or the 
Bureau's market awareness has led it to believe there are uncertainties 
requiring attention.
    A substantial portion of the Bureau's personnel and other resources 
are devoted to these efforts. The Bureau intends to continue engaging 
closely and working with industry and other stakeholders to answer 
questions, provide regulatory support and guidance, and evaluate any 
issues industry and consumers experience as rules are issued and 
implemented. The Bureau also will continue its coordination with other 
federal government regulators to promote a consistent regulatory 
experience for industry. The Bureau is aware that many regulated 
entities have access to resources, counsel, advice, and processes of 
their own beyond the tools provided by the Bureau that they may use to 
assist in the interpretation of regulatory requirements and achieve 
regulatory compliance. The Bureau does not have the capacity to replace 
these private resources and tools, and does not believe that it would 
be desirable as a policy matter for the Bureau to try to do so. The 
Bureau will continue to engage in broad efforts to obtain industry 
feedback and attempt to employ its resources to provide broad industry 
and consumer support and guidance through the most efficient and 
appropriate means. The Bureau believes that experience with the NAL 
process will assist the Bureau in evaluating other potential steps.
    The Policy being finalized today is intended to be one additional 
tool in the Bureau's kit to facilitate compliance and innovation, to 
supplement the foregoing means in instances where no-action treatment 
appears to offer advantages. Most of the Bureau's guidance resources 
will continue to be devoted to efforts other than NALs, as discussed 
above. The NAL Policy is intended to make efficient use of Bureau 
resources by focusing on matters of significant uncertainty, e.g., 
where technological developments have given rise to novel products not 
envisioned at the time existing statutes and regulations were issued, 
and substantial regulatory uncertainty poses a barrier to marketplace 
innovation. The Policy calls on applicants to identify the relevant 
facts, and specific regulatory issues needing attention, because 
applicants are well-positioned to do so effectively and insightfully. 
As contrasted with amendment of a regulation or an official 
interpretation, no-action treatment may often be a more useful tool for 
such cases because, among other things, the novel aspects of the 
product in question may be subject to evolution, the policy and legal 
implications are likely not yet sufficiently well understood to justify 
a definitive regulatory treatment of the relevant issues, and the time 
required to mature such a definitive treatment may be inconsistent with 
product-innovation needs of industry.

B. Matters Concerning Other Regulators

    Two commenters requested clarification about coordination between 
Bureau staff and federal prudential regulators, stating that a NAL may 
be of little benefit to an institution whose prudential regulator 
considers a proposed product to violate applicable requirements. Other 
commenters urged the Bureau to make NALs binding on other regulators, 
to shield a NAL-covered product from the prospect of adverse treatment 
by another regulator.
    The Bureau has not modified the Policy in response to these 
comments. Bureau staff regularly consults with other governmental 
agencies, Federal and State, with respect to financial industry 
matters, including product innovations. Applicants should be aware that 
Bureau staff may consult with other governmental agencies that may have 
enforcement, supervisory or licensing authority over the applicant, or 
other interest in matters relating to a NAL, in appropriate cases. The 
NAL Policy requires that NAL applicants provide information regarding 
relevant governmental investigations, licensing discipline, supervisory 
reviews, and enforcement actions, and this information may be a subject 
of discussions by Bureau staff with other governmental agencies. If an 
applicant is a depository institution, it should anticipate that Bureau 
staff may communicate with the applicant's primary federal prudential 
regulator and appropriate state regulators in evaluating issuance of a 
NAL.
    While the Bureau may, in some circumstances, have the authority to 
issue waivers of otherwise-applicable legal requirements, or to 
establish definitive interpretations of legal requirements, or take 
similar actions, NALs issued under today's Policy are limited to a 
statement by Bureau staff that it does not intend to recommend 
enforcement or supervisory action by the Bureau. As such, they are not 
intended to bind other agencies. Other agencies will remain free to 
make independent determinations concerning their respective authorities 
and concerns. As discussed above, the Bureau will continue to evaluate 
its existing guidance tools and other guidance tools available to it, 
and nothing in today's Policy rules out or otherwise addresses other 
actions that the Bureau may take, for example to issue waivers, 
identify exceptions, provide interpretations, or undertake other 
regulatory relief, in appropriate circumstances.

C. NALs Concerning UDAAPs

    The Proposed Policy indicated that Bureau staff would presumptively 
not issue NALs where the request concerns a legal or product 
environment that the staff considers to be inappropriate for no-action 
treatment, and provided the example that, at the present time, the 
staff does not anticipate no-action treatment of unfair, deceptive, or 
abusive acts or practices (UDAAP) matters. The Bureau received two 
types of comments regarding this statement about UDAAP matters in the 
Proposed Policy. First, two industry commenters made the point that a 
NAL would have little utility if it did not include some assurance that 
the Bureau would not pursue a UDAAP claim against the requester for 
offering the same product addressed in the letter. Second, several 
industry commenters more generally urged that UDAAP matters should not 
be categorically ruled out, and that UDAAPs may be particularly 
important areas of NAL treatment.
    The statement in the Proposed Policy was not directed at the 
``follow on'' UDAAP concern raised by the first type of comment. As 
detailed in Section C of the Policy, in deciding whether to provide a 
NAL, staff considerations will include, among other things:
    <bullet> ``The extent to which the requester's product structure, 
terms and conditions, and disclosures to and agreements with consumers 
enable

[[Page 8689]]

consumers to meaningfully understand and appreciate the terms, 
characteristics, costs, benefits, and risks associated with the 
product, and to act effectively to protect themselves from unnecessary 
cost and risk'';
    <bullet> ``The extent to which evidence, including the requester's 
own testing, indicates that the product's aspects in question may 
provide substantial benefits to consumers''; and
    <bullet> ``The extent to which the requester controls for and 
effectively addresses and mitigates risks to consumers.''
    Given that a NAL will be based, in part, on such factors, it is 
highly unlikely that staff would first provide a NAL--which would 
include a statement that staff has no present intention to recommend 
initiation of an enforcement or supervisory action against the 
requester in respect to the particular aspects of its product under the 
specific identified provisions and applications of statutes or 
regulations that are the subject of the NAL--and then recommend 
initiation of such action in respect to those same particular aspects 
of its product under the Bureau's UDAAP authority in the absence of new 
facts or circumstances. For example, if staff provided a NAL in 
response to a request stating that there was substantial uncertainty 
regarding whether particular disclosures comply with TILA and 
Regulation Z, the requester could expect that staff would not then 
recommend an enforcement or supervisory action on the basis that those 
same disclosures were deceptive under Dodd-Frank Act section 1031--
except in the absence of new or extraordinary circumstances. At the 
same time, a grant of NAL treatment respecting a particular aspect of a 
product should not be understood to excuse potential UDAAP violations 
that might arise from other aspects of the product, such as marketing 
or operation that were not addressed in the NAL letter or stem from 
subsequent changes in the product.
    The Bureau also recognizes the perspective behind the second type 
of comment. The Bureau's statement about UDAAP matters in the Proposed 
Policy was based primarily on two considerations. First, evaluation of 
whether an act or practice constitutes a UDAAP is typically an 
intensively factual question that requires detailed consideration of a 
wide range of potentially relevant circumstances. Such evaluations can 
be more complicated, and uncertain, than evaluation of an act or 
practice with respect to a regulatory or statutory provision that is 
drawn more narrowly and precisely than the statutory UDAAP 
prohibitions. This complexity may be especially pertinent in the 
context of requests for NAL treatment under the Policy, which are 
limited to instances in which there is substantial uncertainty 
regarding whether the particular aspects of the product identified in 
the request are unfair, deceptive, or abusive. Second, as noted in the 
Proposed Policy, the Bureau has quite limited resources to devote to 
consideration and issuance of NALs at this time. The Bureau is 
concerned that devoting attention to UDAAP-focused NAL requests could 
misallocate its resources away from more narrowly-focused cases that 
are more likely to be workable NAL candidates. However, the Bureau need 
not make a categorical determination at this time.
    Accordingly, the example in Section B of the Proposed Policy 
regarding UDAAP matters has been deleted from the Policy. The Bureau 
cautions, however, that this change should not be interpreted as 
portending the issuance of a significant volume of such UDAAP-focused 
NALs. As noted in the Proposed Policy and elsewhere in this Final 
Policy Statement, the Bureau anticipates that NALs will be provided 
rarely because they require a thorough and persuasive demonstration of 
the appropriateness of NAL treatment. The considerations referred to 
above are likely to mean that UDAAP-focused NALs will be particularly 
uncommon.

D. Timetable for Issuance of a NAL

    Several industry commenters suggested that the Bureau adopt a 
specific timetable for approval or denial of a NAL once an application 
has been submitted. These commenters generally expressed a view that 
prescriptive timetables on the order of 45, 60, or 90 days are 
necessary in order to accommodate the rapid development processes of 
novel products. At the same time, a number of industry commenters, 
including some of those urging prescribed timetables for action on 
applications, expressed the view that it is important that prospective 
applicants have an opportunity to confer informally with Bureau staff 
before making an application, in order to align expectations and to 
allow for development and adjustments before making any formal 
application.
    Although Bureau staff will make reasonable efforts to respond to 
applications in a timely manner, the Bureau has not included any strict 
timetable in the Policy. If the NAL process does not reach a conclusion 
that is in keeping with an innovator's timing or other needs, an 
innovator may withdraw its application and proceed as it considers 
appropriate with respect to its product without a NAL. Because NAL 
applications are expected to be individualized events on the part of 
the applicant and Bureau staff involving novel products, because 
product changes may continue during the NAL process, and because the 
Bureau does not yet have concrete experience in processing NAL 
applications, the Bureau is not prepared to prescribe a prescriptive 
timetable by which an application must be resolved. As noted in 
footnote 7 of the Policy, innovators are encouraged to contact staff 
for informal preliminary discussion in advance of filing an application 
for a NAL. Such discussions are expected to address the potential 
applicant's product development plans, information-sharing, any 
anticipated complications in the NAL process, and anticipated 
timetables in light of such considerations.

E. Information To Be Included in Applications

    Several industry representatives criticized the Proposed Policy as 
requiring applicants to provide an unduly burdensome volume of 
information. Some commenters suggested that information requirements be 
minimized specifically for smaller organizations that may have 
relatively fewer resources to devote to the NAL process. A number of 
commenters requested changes in the Proposed Policy's requirements that 
applicants identify the particular provisions of statutes or 
regulations about which NAL treatment is being requested, state why NAL 
treatment is necessary and appropriate to remove substantial regulatory 
uncertainty, and provide a candid explanation of potential consumer 
risks. In addition to asserting that it would be burdensome to provide 
such information, commenters expressed concern that providing 
information along these lines could have the effect of requiring 
applicants to target their products for third-party challenge if a NAL 
application is made public.
    The Bureau has not changed these information requirements in the 
Policy in response to these comments. Whenever any conscientious firm, 
large or small, intends to launch a consumer financial product that 
raises substantial regulatory questions, the Bureau expects that the 
firm would on its own, as a matter of its compliance obligations wholly 
apart from a NAL application, undertake carefully to identify and 
evaluate the consumer risks, regulatory issues, and other matters the 
Policy requires a NAL application to address.

[[Page 8690]]

In this respect, the Bureau does not expect the Policy to involve 
substantial additional information-gathering burdens. While the Bureau 
understands that some innovators find it burdensome to undertake their 
own assessment of applicable regulatory and other legal obligations, 
consumer impacts that their products might create, and other relevant 
matters, the Bureau is not in a position, through its NAL policy, to 
perform these compliance obligations for industry members.
    The Bureau's intention is to devote its NAL resources at this time 
to addressing instances in which substantial uncertainty in the 
statutes and regulations that are within its jurisdiction are creating 
a barrier to bringing consumer-beneficial products to market. If an 
applicant cannot identify its product as presenting such a case, or if 
the applicant does not intend to be candid in its request and related 
communications, the Bureau's resources can more usefully be focused 
elsewhere. To be clear, firms are not required to seek NAL treatment 
before launching a product. Moreover, in identifying areas of 
regulatory uncertainty an applicant is not required to concede that its 
product contravenes any requirement. On the contrary, the Policy 
explicitly calls on the applicant to explain why it believes its 
product should not be treated as subject to or precluded by pertinent 
statutes and regulations as properly understood and applied. If a 
prospective applicant believes that information regarding its product 
requires confidential protection, informal advance discussion with the 
staff can explore what particular information and detail is necessary 
to be included in an application, the timing of NAL issuance, and how 
best to protect proprietary matter. In addition, section A.15 of the 
Policy provides that an application may include a request for 
confidential treatment of certain information. If a NAL is issued, it 
may be unavoidable that its publication will, to some extent, publicly 
identify aspects of regulatory uncertainty that are involved, but the 
Bureau believes that such transparency to industry and consumers is a 
critical value to be served by the NAL process.

F. Public Comment on NALs

    Some commenters in the consumer advocacy community requested that 
the Bureau modify the Proposed Policy to provide that any NAL will be 
subject to a 30-day notice-and-comment period, preferably in advance of 
NAL issuance. These commenters asserted that such a process is 
advisable to balance an applicant's self-interested submissions by 
bringing to bear other viewpoints through a public process.
    The Bureau declines to adopt the comment period suggestion. Comment 
periods are not typical of other agencies' no-action letter procedures. 
The Bureau believes that imposing such a comment period requirement in 
advance of issuance would unnecessarily discourage NAL applications and 
delay the NAL process, inhibiting the intended benefits of the Policy. 
Staff has the ability to conduct outreach to the public as needed to 
obtain input on a variety of regulatory matters, which includes issues 
pertaining to NAL requests. Staff also intends to monitor products that 
are the subject of NALs on an ongoing basis, including comments that 
may be received from the public following issuance of a NAL. This 
monitoring will not be confined to a 30-day or other prescribed period.

G. Protection of Proprietary Information

    Several commenters expressed concern that publication of NALs, 
which would include publication of a version or summary of the 
application, may compromise entities' proprietary business information 
or trade secrets. Some commenters raised a concern that, if the Bureau 
were to deny a NAL application for innocuous reasons and announce the 
denial, it might cause injury to the applicant if it later introduced 
the subject product into the marketplace. Other commenters, including 
industry commenters, specifically encouraged routine publication so 
that industry members will have insight into the Bureau staff's 
perspectives.
    The Bureau considers that publication of NALs issued by staff is an 
important aspect of the Bureau's transparency principles. The released 
version or summary of the application and the terms of the NAL will 
provide relevant and potentially important information to consumers and 
industry concerning the new product and Bureau staff's perspective. In 
general, the consumer-facing characteristics of the product involved 
will become known to the market at the time of product launch in any 
event. The Policy does not specify the timing for the Bureau's NAL 
publication. To the extent that a potential applicant has concerns 
regarding the public release of particular information, Bureau staff 
plans to confer with the applicant, in advance of a submission or 
later, to discuss whether the information is necessary to submit as 
part of the application or otherwise, redaction from any documents to 
be released publicly, timing of any release, application of the 
Bureau's rule concerning Disclosure of Records and Information, 12 CFR 
part 1070, and other relevant matters.
    Denials of a request for a NAL generally would not be published. 
However, because a circumstance may arise in which publication of a 
denial would be in the public interest, the Policy does not 
categorically rule out publication of denials.
    The finalized Policy makes one editing change with respect to 
publication of NALs and applications, to conform section D of the 
Policy to the wording of section B of the Policy with respect to 
publication of a ``a version or summary of'' the request.

H. Modification or Revocation of NALs

    Under the Policy, a NAL is subject to subsequent revocation or 
modification in the discretion of Bureau staff, and may be immediate 
upon notice. Revocation or modification of a NAL does not itself 
constitute a determination that a product violates any regulatory 
requirement or that the firm must withdraw the product from the market. 
Obviously, however, modification or revocation reflects a change in 
facts, circumstances, or outlook on the part of Bureau staff. Some 
industry and consumer commenters urged the Bureau to adopt procedural 
protections around the revocation/modification process, including 
suggesting that the Bureau communicate with recipients prior to 
revocation or modification, and that it provide a grace period to allow 
recipients to modify or cease relevant policies or practices.
    In response, the Bureau has added a statement to section D.6 of the 
Policy concerning revocations or modifications initiated by staff. 
Unless there is a reason not to do so in a particular case, before 
determining to revoke or modify a NAL, Bureau staff plans to 
communicate with the requesting entity (or entities) regarding the 
grounds for potential revocation or modification and permit an 
opportunity to respond. If staff revokes or modifies a NAL, it intends 
to do so in writing. Staff plans to make revocations and modifications 
public.

I. Limitation to Emerging Products Involving Substantial Regulatory 
Uncertainty

    Several commenters suggested that the Bureau not limit NALs to 
instances of emerging products, or that it not limit NALs to instances 
of substantial regulatory uncertainty. These commenters advocated that 
the Bureau provide NALs dealing with products that are already 
established and/or

[[Page 8691]]

where there is no substantial regulatory uncertainty. The Bureau does 
not believe such a change to the Policy is desirable at this time. The 
Bureau's resources available to devote to NALs are limited, and the 
Bureau considers it desirable to focus these resources at this time on 
reducing barriers to innovation. If a product is already established in 
the marketplace, or if there are no substantial regulatory 
uncertainties interfering with its development, then Bureau resources 
for reducing barriers to innovation would be better allocated to other 
NAL cases, or to other efforts.

J. Potential Risks and Benefits to Consumers

    Some consumer advocates urged the Bureau to revise the Proposed 
Policy to specifically limit NALs to products where staff is convinced 
that the product will clearly not involve any risk to consumers. 
Reflecting a different perspective, a number of industry commenters 
urged that the Bureau eliminate the requirement that a proposed NAL 
product promise substantial benefits to consumers. Some of these 
commenters considered that application of the ``substantial benefits'' 
standard would involve the Bureau in inappropriately choosing winners 
and losers, and some expressed the view that assessment of substantial 
benefits was unknowable for new products or unduly subjective.
    The finalized Policy has not incorporated the changes advocated by 
either of these two perspectives. The Bureau believes that its Policy 
has appropriately articulated requirements with respect to both risks 
and benefits. The Policy specifically requires an applicant to candidly 
disclose potential consumer risk information, and establishes that NAL 
applications would be assessed on the basis of such risks and how they 
may be effectively addressed and mitigated. In addition, issuance of a 
NAL may be conditioned on the provision of future data to enable Bureau 
staff to monitor ongoing risk and respond as necessary. A firm is not 
required to obtain a NAL in order to launch a product. But issuance of 
NALs is committed to the discretion of Bureau staff, and the Policy 
appropriately requires an applicant to identify anticipated consumer 
benefits so that Bureau staff can evaluate whether the request merits 
the diversion of the Bureau's limited resources away from other 
important consumer protection work.

K. Denials of NAL Requests and Publication of Denials

    Under the Policy, decisions whether to issue a NAL are committed to 
the discretion of Bureau staff. Section B of the Policy describes the 
categories of formal responses that the staff expects normally to use 
in response to a request (granting, denying, or declining to grant or 
deny, the request). Section C of the Policy identifies 10 factors that, 
among others, staff plans to consider in deciding whether to issue a 
NAL. Several commenters suggested that the Proposed Policy be amended 
to prescribe that staff elaborate specific reasons when it determines 
that a particular application for a NAL will not be granted. The 
principal point advanced in favor of requiring such a statement of 
reasons is that it would provide substantive guidance to industry 
regarding Bureau analysis of regulatory issues. Some other commenters 
suggested that all denials be made public. Relatedly, some commenters 
interpreted section B of the Proposed Policy to mean that, in some 
cases, the Bureau would not communicate in any way with the requesting 
entity.
    The Bureau does not agree that it would be advisable to require 
staff to provide specific reasons for declining to provide NALs, or 
that denials generally should be made public. Publishing such 
statements regarding denials is not typical of no-action letter 
programs of other agencies, and the Bureau does not believe that 
providing such statements about denials would be a productive method of 
industry or public guidance, when weighed against the burden on Bureau 
resources that would be involved. The Bureau has limited resources to 
devote to NALs, and it believes that those resources are best focused 
on the work required to grant NALs when appropriate and to monitor 
those that are granted. As noted elsewhere, individual applicants are 
advised to contact staff in advance for informal discussion before 
committing significant effort toward a potential NAL application. In 
the unusual case in which none of the types of responses described in 
Part B of the Policy is provided, the staff plans to notify the 
requester that its response has been received and that staff has 
decided not to provide a response that corresponds to one of the types 
described in Part B of the Policy.

L. Anticipated Volume of NALs

    As stated in the Proposed Policy, the Bureau anticipates that NALs 
would be provided only on the basis of exceptional circumstances and a 
thorough and persuasive demonstration of the appropriateness of such 
treatment. Several commenters expressed dissatisfaction that NALs are 
likely to be rarely issued, and urged that the Bureau should make NALs 
more widely available, recognizing that they may later be withdrawn if 
necessary.
    Bureau staff currently devotes considerable effort to maintaining 
ongoing communication with financial services product developers and 
other industry members, including concrete informal discussions about 
forthcoming innovations and regulatory considerations. Based on this 
experience, the Bureau estimates that, realistically, it will on 
average receive one to three actionable applications per year. If the 
volume of viable applications exceeds this volume, the Bureau will work 
to accommodate the need. The Policy anticipates that staff would 
provide no-action treatment only on a thorough-and-persuasive 
demonstration that the relevant criteria, as specified in the Policy, 
are met. That NALs may be withdrawn at a later stage is not, in the 
Bureau's view, a justification to provide no-action treatment based on 
unrefined product concepts, inadequate information, or incomplete 
attention by an applicant to regulatory requirements or mitigation of 
consumer protection risks.

M. Covering Third Parties

    Some commenters urged the Bureau to address no-action protection of 
third parties that may be associated with an applicant's product, such 
as firms that provide functions that are integrated with the product's 
operation or distribution, or provide ancillary products or services. A 
product developer seeking NAL treatment may not intend itself to be the 
provider of that product to consumers, or may depend on other firms as 
service providers or in other ways. These other firms may be reluctant 
to participate in the commercialization of the product if they lack NAL 
protection, but for a variety of legitimate commercial reasons they may 
not be identifiable at the time of the NAL application or issuance. 
Some commenters also urged the Bureau to allow trade associations to 
submit requests on behalf of their members.
    The Bureau is sympathetic to the complications described. The 
Policy envisions that a NAL application may be submitted jointly by 
multiple firms, which may ease some of these complications. The Bureau 
is not, however, willing to grant NAL treatment to a firm that is not 
identified in the

[[Page 8692]]

application process and has not agreed to the affirmations and 
undertakings specified by the Policy (such as affirmations regarding 
the accuracy of information presented about the product and the firm, 
undertakings to provide additional information, and descriptions of 
safeguards the applicant will employ). The Bureau envisions that, in 
many cases, a firm that comes to be involved in the provision of a 
product, though not itself the applicant covered by a NAL, will draw 
sufficient comfort from a NAL issued to the identified applicant. Where 
this is not so, Bureau staff will be available to confer with the 
applicant, and the other firm(s), regarding the reasons why the other 
firm(s) were not co-applicants, whether an issued NAL may be modified, 
and other possible approaches to the situation. For similar reasons, 
the Bureau is not willing to grant NAL treatment to trade associations 
on behalf of their members.

N. Limitations on Quantity of Transactions or Period of Time

    Some commenters sought clarification regarding the Proposed 
Policy's anticipation that a NAL may be subject to time limitations or 
limitations on the quantity of transactions. The Policy, which is 
slightly revised on this point for clarity, provides that a NAL issued 
by Bureau staff will generally include a description of any conditions 
or limitations attending no-action treatment, such as the requester's 
undertaking to provide additional safeguards to consumers, or to share 
certain types of data with the Bureau, as well as any limitations as to 
time period or quantity of transactions. These NAL terms will be 
informed by commitments identified in the application and by staff's 
evaluation of consumer risks. The Bureau expects such considerations to 
be taken into account on a case-by-case basis. If a NAL application is 
based on uncertainty regarding a particular regulatory safeguard, for 
example, the applicant may find it appropriate to introduce a different 
method to safeguard comparable consumer protection concerns. If an 
applicant intends to test its product in a particular way, and review 
consumer data arising from the test, the applicant may suggest limiting 
the NAL to those terms as a factor in demonstrating limitations on 
consumer risks. If an applicant envisions the iterative development of 
a product, different limitations or safeguards may apply at successive 
stages of the development.

IV. 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.\4\
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    \4\ 5 U.S.C. 603(a), 604(a).
---------------------------------------------------------------------------

V. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et 
seq.), Federal agencies are generally required to seek the Office of 
Management and Budget (OMB) approval for information collection 
requirements prior to implementation. Further, the Bureau may not 
conduct or sponsor a collection of information unless OMB approves the 
collection under the PRA and it displays a currently valid OMB control 
number. Notwithstanding any other provision of law, no person is 
required to comply with, or is subject to penalty for failure to comply 
with, a collection of information if the collection instrument does not 
display a currently valid OMB control number. OMB has approved the 
collections of information contained this Policy. The OMB Number is 
3170-0059 (Expiration Date: 02/28/2019).

VI. Final Policy

    The text of the final Policy is as follows:

POLICY ON NO-ACTION LETTERS

    Under Title X of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act), the Bureau's objectives include 
``facilitating [consumer] access'' to and ``innovation'' in markets for 
consumer financial products.\5\ The Bureau recognizes that, in certain 
circumstances, some may perceive that the current regulatory framework 
may hinder the development of innovative financial products that 
promise substantial consumer benefit because, for example, existing 
laws and rules did not contemplate specific products. In such 
circumstances, it may be substantially uncertain whether or how 
specific provisions of certain statutes and regulations should be 
applied to such a product--and thus whether the federal agency tasked 
with administering those portions of a statute or regulation may bring 
an enforcement or supervisory action against the developer of the 
product for failure to comply with those laws. Such regulatory 
uncertainty may discourage innovators from entering a market, or make 
it difficult for them to develop suitable products or attract 
sufficient investment or other support.
---------------------------------------------------------------------------

    \5\ 12 U.S.C. 5511(b)(5). As used in this Policy, the term 
``product(s)'' means ``product(s) and services'' or ``products or 
service(s),'' as appropriate.
---------------------------------------------------------------------------

    Federal agencies can reduce such regulatory uncertainty in a 
variety of ways. For example, an agency may clarify the application of 
its statutes and regulations to the type of product in question--by 
rulemaking or by the issuance of less formal guidance. Alternatively, 
an agency may provide some form of notification that it does not intend 
to recommend initiation of an enforcement or supervisory action against 
an entity based on the application of specific identified provisions of 
statutes or regulations to its offering of a particular product. This 
Policy is concerned with the latter means of reducing regulatory 
uncertainty in limited circumstances.
    Pursuant to its authorities under the Dodd-Frank Act, the Bureau is 
today releasing its Policy on No-Action Letters (Policy). Under the 
Policy, an entity may submit a request for a No-Action Letter from 
Bureau staff (staff). A No-Action Letter would include a statement that 
the staff has no present intention to recommend initiation of an 
enforcement or supervisory action against the requester with respect to 
particular aspects of its product, under specific identified provisions 
of statutes or regulations. Such a letter may be limited as to time, 
volume of transactions, or otherwise, and may be subject to potential 
renewal. Whether and how to provide a No-Action Letter or otherwise 
respond to such requests, including any limitations or conditions on 
acceptance, will be within the sole discretion of the staff.
    The Policy is intended to facilitate consumer access to innovative 
financial products that promise substantial benefit to consumers, 
taking into account other marketplace offerings, and also to enhance 
compliance with applicable federal consumer financial laws.\6\ By 
furnishing a dedicated mechanism through which substantial regulatory 
uncertainty can be reduced, the Policy is also intended to discourage

[[Page 8693]]

the offering of innovative consumer-harmful financial products in such 
circumstances. In addition, because No-Action Letters often will be 
conditioned on specified consumer protection conditions designed to 
satisfy--or even exceed--applicable disclosure requirements and 
substantive protections, the Bureau expects the Policy to benefit 
consumers in further ways. The Bureau also expects the Policy to help 
further its consumer protection functions and objectives, including 
market monitoring and rulemaking, particularly when a No-Action Letter 
is conditioned on a commitment by the requester to share data about the 
product with the Bureau, or to engage in other consultation that may 
help inform Bureau decisions regarding whether to take further action 
in connection with the financial product in question.
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    \6\ The Policy and any No-Action Letter is not intended to, nor 
should it be construed to: (1) Restrict or limit in any way the 
Bureau's discretion in exercising its authorities, including the 
provision of no-action or similar relief other than pursuant to the 
Policy; (2) constitute an interpretation of law; or (3) create or 
confer upon any covered person (including one who is the subject of 
the Bureau supervisory, investigation, or enforcement activity) or 
consumer, any substantive or procedural rights or defenses that are 
enforceable in any manner.
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    The Policy has five sections:
    <bullet> Section A describes information that should be included in 
requests for a No-Action Letter.
    <bullet> Section B describes types of responses the staff may 
provide to requests for a No-Action Letter.
    <bullet> Section C lists factors the staff may consider in deciding 
whether to provide a No-Action Letter.
    <bullet> Section D describes the general content and limitations of 
No-Action Letters.
    <bullet> Section E describes disclosure of data received from 
entities who have requested No-Action Letters.

A. Submitting Requests for No-Action Letters

    Requests for a No-Action Letter should be submitted in writing via 
email to <a href="/cdn-cgi/l/email-protection#b3e3c1dcd9d6d0c7f0d2c7d2dfcac0c7f3d0d5c3d19dd4dcc5"><span class="__cf_email__" data-cfemail="3e6e4c51545b5d4a7d5f4a5f52474d4a7e5d584e5c10595148">[email protected]</span></a>.\7\ Submitted requests may be 
withdrawn by the requester at any time.
---------------------------------------------------------------------------

    \7\ The email subject line should begin ``Request for No-Action 
Letter.'' The Policy is one component of the Bureau's Project 
Catalyst initiative, which invites organizations to bring 
innovation-related concerns to the Bureau's attention at 
<a href="/cdn-cgi/l/email-protection#7b2b0914111e180f381a0f1a1702080f3b181d0b19551c140d"><span class="__cf_email__" data-cfemail="7d2d0f1217181e093e1c091c11040e093d1e1b0d1f531a120b">[email protected]</span></a>. Innovators are advised to use the same 
Project Catalyst point of contact to initiate a preliminary 
discussion of a potential No-Action Letter. There are no formal 
submission requirements to request such a preliminary discussion.
---------------------------------------------------------------------------

    Requests should include the following:
    1. The name(s) of the entity or entities and individual(s) 
requesting the No-Action Letter.
    2. A description of the consumer financial product involved, 
including:
    a. how the product functions, and the terms on which the product 
will be offered;
    b. the roles and relationships of all parties to transactions 
involving the product; and
    c. the manner in which it is offered to and used by consumers, 
including any consumer disclosures.
    3. The timetable on which the product is expected to be offered. 
No-Action Letters are not intended for either well-established products 
or purely hypothetical products that are not close to being able to be 
offered.
    4. An explanation of how the product is likely to provide 
substantial benefit to consumers differently from the present 
marketplace, and suggested metrics for evaluating whether such benefits 
are realized.
    5. A candid explanation of potential consumer risks posed by the 
product--particularly as compared to other products available in the 
marketplace--and undertakings by the requester to address and minimize 
such risks.
    6. A showing of why the requested No-Action Letter is necessary and 
appropriate to remove substantial regulatory uncertainty hindering the 
development of the product, including:
    a. Identification of each of the specific provisions of the 
statutes and regulations regarding which a No-Action Letter is being 
requested, and a showing how each of these specific provisions of the 
statute(s) and regulation(s) should be applied to the product is 
substantially uncertain, including analysis of the relevant legal 
authorities and policy considerations.
    b. A showing of why the product's aspects in question should not be 
treated as subject to or precluded by the specific identified 
statute(s) and regulation(s), and/or how the proposed compliance of the 
product's aspects in question with the specific identified statute(s) 
and regulation(s) is appropriate.
    c. A showing of the product's compliance with other relevant 
federal and state regulatory requirements.
    d. A showing of why the substantial regulatory uncertainty that is 
the subject of the request cannot be effectively addressed through 
means other than the requested No-Action Letter, such as modification 
of the product.
    7. An affirmation that the facts and representations in the request 
are true and accurate.
    8. A commitment by the requester to provide information requested 
by the staff in its evaluation of the request.
    9. A description of data that the requester possesses, and data it 
intends to develop, pertaining to the factual bases cited in support of 
the request and a statement of any undertaking by the requester, if the 
request is granted, to share appropriate data regarding the product 
with the Bureau, including data regarding the impact of the product on 
consumers. This description should also address the requester's 
intentions regarding consultation with the Bureau in its plans for 
development of additional data.
    10. Commitments that, if the request is granted, the requester will 
not represent that the Bureau or its staff has: (i) Licensed, 
authorized or endorsed the product, or its permissibility or 
appropriateness, in any way; (ii) determined, or provided an 
interpretation, that the product is or is not in compliance with legal 
or other requirements, or has been granted an exception, waiver, safe 
harbor, or comparable treatment; or (iii) granted No-Action Letter 
treatment with respect to any aspect of the requester's offerings or 
any provision of law other than those expressly addressed in the No-
Action Letter.
    11. An affirmation that, to the requester's knowledge (except as 
specifically disclosed in the request), neither the requester nor any 
other party with substantial ties to transactions involving the product 
is the subject of an ongoing, imminent, or threatened governmental 
investigation, supervisory review, enforcement action, or private civil 
action respecting the product, or any related or similar product; and 
an undertaking promptly to notify the Bureau (unless the request for a 
No-Action Letter has been withdrawn or denied) of any such governmental 
investigation, supervisory review, enforcement action, or private civil 
action that is initiated or threatened.
    12. An affirmation that (except as specifically disclosed in the 
request) the principals of the requester have not been subject to 
license discipline, adverse supervisory action, or enforcement action 
with respect to any financial product, license, or transaction within 
the past ten years.
    13. A statement specifying whether the request is limited to a 
particular time period, to a particular volume of transactions, or to 
other limitations.
    14. A description of any particular consumer safeguards the 
requester will employ, although they may not be required by law, if a 
No-Action Letter is issued, including any mitigation of potential for 
or consequences of consumer injury. The description should specify the 
requester's basis for asserting and considering that such safeguards 
are effective. The description should also address any future study the 
requester will undertake to further evaluate the effectiveness of such 
safeguards.
    15. If a request for confidential treatment is made, this request 
and the basis therefor should be included in a

[[Page 8694]]

separate letter and submitted with the request for a No-Action Letter. 
Requesters are advised to specifically identify data that the Requester 
believes to be confidential supervisory information that should be 
shielded from public disclosure.

B. Staff Response to Requests for No-Action Letters

    The decision whether to respond to a request for a No-Action 
Letter, and the nature of any response, is within the staff's sole 
discretion. Depending on the circumstances, the staff may: (i) Grant 
the request (which grant may be partial, or may be subject to 
limitations or conditions); (ii) deny the request; (iii) specifically 
decline to either grant or deny the request, with an explanation; or 
(iv) specifically decline to either grant or deny the request, without 
explanation. The staff may, but is not required to, communicate with 
the requester before making any decision regarding whether and how to 
respond to the request to seek clarification or for other purposes. The 
staff may permit requests to be modified in the course of such 
communications.
    Type (i) responses, and a version or summary of the request, 
generally would be published on the Bureau's Web site.\8\ Type (ii) 
responses generally would be provided to the requester but generally 
would not be published on the Bureau's Web site.\9\ Type (iii) and (iv) 
responses generally would be provided to the requester and may be 
published on the Bureau's Web site, particularly if the staff believes 
that the information will be in the public interest.
---------------------------------------------------------------------------

    \8\ Type (i) responses are further discussed in Section D below.
    \9\ The Bureau may publish a denial on its Web site if it 
believes that doing so is in the public interest.
---------------------------------------------------------------------------

    Non-exclusive examples of circumstances under which the staff 
presumptively would provide only responses of type (iii) or (iv), or, 
where appropriate, no response at all, include:
    1. The requester or its principals are the subject of ongoing 
governmental law enforcement investigation, supervisory review, or 
enforcement action respecting the product or a related or similar 
product.\10\
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    \10\ If the staff decides to provide a type (iii) response to 
the entity in such circumstances, the response would not be 
published on the Bureau's Web site.
---------------------------------------------------------------------------

    2. The request concerns an area in which the Bureau is engaged in 
ongoing or anticipated rulemaking, supervisory, enforcement, or other 
initiatives.
    3. The request concerns matter that the staff considers to be 
inappropriate for no-action treatment.
    4. The staff has decided not to invest the Bureau resources that 
appear likely to be necessary to address the request adequately.
    No-Action Letters will not be routinely available. The Bureau 
anticipates that No-Action Letters will be provided rarely and on the 
basis of exceptional circumstances and a thorough and persuasive 
demonstration of the appropriateness of such treatment. Requesters do 
not have a legal entitlement to no-action treatment of regulatory 
uncertainties, and Bureau resources available for consideration of No-
Action Letter requests are limited in light of other Bureau priorities. 
Requesters may wish to include in their submissions any particular 
reasons why their request should be considered by the Bureau to be a 
matter of special importance.

C. Staff Assessment of Requests for No-Action Letters

    The staff considerations, in deciding whether to provide a No-
Action Letter,\11\ include:
---------------------------------------------------------------------------

    \11\ The decision whether to provide a No-Action Letter, and the 
terms on which it may be provided, are within the staff's sole 
discretion.
---------------------------------------------------------------------------

    1. The extent to which the requester's product structure, terms and 
conditions, and disclosures to and agreements with consumers enable 
consumers to meaningfully understand and appreciate the terms, 
characteristics, costs, benefits, and risks associated with the 
product, and to act effectively to protect themselves from unnecessary 
cost and risk.
    2. The extent to which evidence, including the requester's own 
testing, indicates that the product's aspects in question may provide 
substantial benefits to consumers.
    3. The extent to which the asserted benefits to consumers are 
available in the marketplace from other products.
    4. The extent to which the requester controls for and effectively 
addresses and mitigates risks to consumers.\12\
---------------------------------------------------------------------------

    \12\ This factor includes the extent to which the requester has 
plans in place for addressing unanticipated consumer harms caused by 
the product and the extent to which the entity possesses the 
resources to compensate injured consumers.
---------------------------------------------------------------------------

    5. The extent to which granting the request is necessary in order 
to reduce substantial regulatory uncertainty for the requester with 
respect to the requester's product.
    6. The extent to which the substantial regulatory uncertainty 
identified by the requester may be better addressed through other 
regulatory means, such as Bureau rulemaking, other Bureau guidance, or 
provision of a waiver under the Bureau's Policy to Encourage Trial 
Disclosure Programs.\13\
---------------------------------------------------------------------------

    \13\ 78 FR 64389 (Oct. 29, 2013).
---------------------------------------------------------------------------

    7. Whether the entity is demonstrably in compliance with other 
relevant federal and state regulatory requirements.
    8. The extent to which the request is sufficiently limited in time, 
volume of transactions, or otherwise, to allow the Bureau to learn 
about the product and the aspects in question while minimizing any 
consumer risk.
    9. The extent to which any data that the entity has provided and 
agrees to provide to the Bureau regarding the operation of the 
product's aspects in question will be expected to further consumer 
protection.
    10. The extent to which public disclosure of relevant data may be 
permitted.

D. Staff Provision of No-Action Letters

    When the staff decides to provide a No-Action Letter, it plans to 
publish the letter, along with a version or summary of the request, on 
the Bureau's Web site. The expected contents of a No-Action Letter 
include the following:
    1. A statement that, subject to the conditions and limitations set 
forth, the staff has no present intention to recommend initiation of an 
enforcement or supervisory action against the requester in respect to 
the particular aspects of its product under the specific identified 
provisions and applications of statutes or regulations that are the 
subject of the No-Action Letter. The statement that the staff has no 
present intention to recommend initiation of an enforcement or 
supervisory action does not mean that the Bureau will not conduct 
supervisory activities or engage in enforcement investigation to 
evaluate the requester's compliance with the terms of the No-Action 
Letter or to evaluate other matters.
    2. A statement that the no-action treatment is limited to the 
requester's offering of the product's aspects in question in the manner 
described, and that it does not pertain to (i) the requester for 
offering the product in a different manner; (ii) the requester for 
offering different products, or with respect to other provisions or 
applications of these or other statutes and regulations, or with 
respect to other aspects of the product; or (iii) any other person.
    3. A statement that the No-Action Letter is based on the facts 
stated and factual representations made in the request, and is 
contingent on the correctness of such facts and factual 
representations.

[[Page 8695]]

    4. A statement (a) disclaiming any intention that the No-Action 
Letter constitutes a determination by the Bureau or its staff about, or 
is an interpretation of, or grants any exception, waiver, safe harbor, 
or similar treatment respecting the statutes and rules identified in 
the request, or their application to the product's aspects in question, 
or otherwise constitutes an official expression of the Bureau's views, 
and that any explanatory discussion should not be interpreted as such 
an interpretation, waiver, safe harbor, or the like, that is binding on 
the Bureau, and (b) that the staff is not necessarily in agreement with 
any legal or policy analysis, any interpretation of data, or any other 
matter, set forth in the request.
    5. A description of any conditions or limitation attending the No-
Action Letter, such as the requester's commitment to provide additional 
safeguards to consumers, or to share certain types of data with the 
Bureau, as well as any limitations as to time period or quantity of 
transactions.
    6. A statement that the No-Action Letter is subject to modification 
or revocation at any time at the discretion of the staff for any 
reason, including that: the facts and representations in the request 
appear to be materially inaccurate or uncertain; the requester fails to 
satisfy conditions or violates limitations specified in the No-Action 
Letter; the product or any of its material features, terms, or 
conditions, is altered; or the staff determines that such modification 
or revocation is appropriate to protect consumers or is otherwise in 
the public interest. Unless there is a reason not to do so in a 
particular case, staff plans to communicate with the requesting entity 
(or entities) regarding the grounds for potential revocation or 
modification in advance of a revocation or modification, and permit an 
opportunity to respond. When staff revokes or modifies a No-Action 
Letter, staff intends to do so in writing. Staff plans to make 
revocations and modifications public.
    7. A statement that the No-Action Letter is not issued by or on 
behalf of any other government agency or any other person, and is not 
intended to be honored or deferred to in any way by any court or any 
other government agency or person.
    8. A statement of any expiration date, or volume limitation, 
applicable to the No-Action Letter (and whether or not the requester 
may seek to renew the No-Action Letter).
    9. A statement that the No-Action Letter becomes inapplicable upon 
failure to adhere to the affirmations or undertakings made in the 
request or stated as conditions of the issuance of the letter. To the 
extent that the facts and representations in the request are materially 
inaccurate, or the requester fails to satisfy conditions or violates 
limitations specified in the No-Action Letter, and in other similar 
circumstances, the No-Action Letter is by its own terms inapplicable 
(even without modification or revocation) and the staff may recommend 
initiating a retrospective enforcement or supervisory action if 
appropriate.

E. Bureau Disclosure of Entity Data

    The Bureau's disclosure of a version or summary of the request and 
any data received from the requester in connection with a request for a 
No-Action Letter is governed by the Bureau's rules regarding Disclosure 
of Records and Information.\14\ For example, 12 CFR 1070.14 generally 
requires the Bureau to make its records available to any person 
pursuant to a request that conforms to the rules and procedures of that 
section, subject to the application of the FOIA exemptions and 
exclusions. To the extent the Bureau affirmatively wishes to disclose 
such data, the terms of such disclosure will be consistent with 
applicable law and the Bureau's own rules and may be specified in a 
separate agreement with the requester. Consistent with applicable law 
and its own rules, the Bureau will seek to redact data to protect 
consumers' privacy interests.
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    \14\ See 12 CFR part 1070.

    Dated: February 2, 2016.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2016-02390 Filed 2-19-16; 8:45 am]
 BILLING CODE 4810-AM-P


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