CFPB issues first no-action letter under Project Catalyst

first_imgLast week, the CFPB announced the issuance of a no-action letter to Upstart Network, Inc., its first under the Bureau’s Project Catalystinitiative.  The initiative, which launched in 2012, is intended to encourage consumer-friendly innovation in the financial marketplace. To do this, Project Catalyst is tasked with engaging with the innovator community, participating in initiatives that inform its policy work, and monitoring emerging trends in order to remain forward-looking.CFPB’s Policy Statement on No-Action LettersUnder the Project Catalyst initiative, the CFPB in 2016 finalized a policy statement on no-action letters to reduce potential regulatory uncertainty and enhance compliance in specific circumstances where “a product holds the promise for significant consumer benefit and where there may be uncertainty around how the product fits within an existing regulatory scheme.”  For example, the CFPB said the formal no-action policy could be appropriate for new products being developed by innovators in financial technology (fintech) or other startups that involve ground-breaking technology that did not exist, and thus wasn’t contemplated, when existing regulations were first adopted.The Bureau issued the policy statement on no-action letters under its authority in §1021 of the Dodd-Frank Act, which empowers the CFPB 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.  See, 12 U.S.C. 5512(b)(1). continue reading » 6SHARESShareShareSharePrintMailGooglePinterestDiggRedditStumbleuponDeliciousBufferTumblrlast_img

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