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Comments on Proposed No-Action Letter (NAL) Policy: Bureau of Consumer Financial Protection; Docket No: CFPB-2014-0025

Dec 30, 2014

The Milken Institute Center for Financial Markets (CFM) provided written comments to the Consumer Financial Protection Bureau (CFPB) on the proposed "no-action letter" (NAL) process.

The CFPB has proposed a NAL process by which firms that are developing innovative financial products can get comfort from the CFPB that the CFPB will not seek an enforcement action against them. While this demonstrates great promise towards the development of a more agile and flexible rule making process, CFM has combed through and identified a number of concerns that could undermine the proposal.

In its December 15, 2014 letter, CFM made a series of recommendations to areas in the proposal that could become drawbacks if left unaddressed. 

Among them include:

  • An unrealistic standard for some of the disclosure requirements for early stage companies.
  • The absence of public evaluative standards
  • The lack of transparent and standardized process
  • The unclear guidance to the safeguarding of proprietary information 

CFM commends the CFPB for the recent NAL proposal, and shares the sentiment that financial market innovations can benefit the consumer. The proposal is an important "first step" that encourages greater financial innovation. 

Download the letter for details.