Fintech Innovation and Expansion
The CFPB has finalized new policies that lay out when companies are likely to receive no-action letters (NALs) that smooth the path for new product offerings and/or authorize “sandboxes” to ensure that such ventures are fully compliant with CFPB expectations under consumer-protection law and rule. However, the new NAL framework does not apply solely to technology or otherwise innovative products, also providing scope for innovation in existing and established consumer-finance products that may tread on or perhaps even be seen to violate federal standards. Even so, these NALs and the new sandbox program do not eliminate potential liability for all providers deemed by federal or state authorities to pose anti-money laundering (AML) or similar risk nor do they ensure that state or federal banking agencies will sign off on new products from a safety-and-soundness perspective regardless of the Bureau’s conclusions about consumer protection.