Credit unions were represented at the regional Consumer Financial Protection Bureau (CFPB) office opening on September 10th, with members of the Compliance Team for LSCU engaged at the small event. This was highlighted as an “Innovation Policies Launch,” and during the event CFPB Director Kathy Kraninger announced three new policies to improve how the Bureau exercises its authority to facilitate innovation and reduce regulatory uncertainty. These policies include:
- A new Compliance Assistance Sandbox (CAS) with no regulatory or statutory exemptions from existing law (specifically TILA, Equal Credit Opportunity Act, and the Electronic Funds Transfer Act) so innovators can develop new technologies to address consumer needs. An approved applicant participating in the sandbox will have a “safe harbor” from liability during the testing period.
- A Trial Disclosure Program (TDP). Under the TDP Policy, covered persons seeking to improve consumer disclosures may test alternative disclosures for a limited time with Bureau permission.
- A revised no-action letter policy (NAL). The NAL Policy provides regulatory certainty through a Bureau statement that, under certain facts and circumstances, the CFPB won’t bring a supervisory or enforcement action regarding specified aspects of a product or service. The new policy improves on the 2016 NAL policy by having a more streamlined review process focused on the benefits and risks to consumers of the product or service in question.
Another takeaway of LSCU from the event was that the CFPB has invited all states to join them in an effort to enhance coordination among federal and state regulators to facilitate financial innovation (American Consumer Financial Innovation Network), and Georgia is just one of seven that have joined as of the event. By being engaged, credit union issues in those states can have a stronger voice!