Therefore, the Bureau should allow firms to request coordination with additional regulators on an ongoing experiment. The Bureau should also build into its Memoranda of Understanding a provision that would, to the greatest extent possible, encourage other regulators to refrain from bringing enforcement actions against firms operating in good faith and in accordance with the Sandbox’s requirements, if the firm’s failure to seek coordination with that regulator at the time of application was reasonable, given the firm’s knowledge then.
• Do not allow the Bureau to substitute its judgement for the market’s with regard to potential consumer benefits. The Bureau intends to solicit information from applicants for both NALs and the Sandbox regarding the expected consumer benefits the product or service will provide, and has stated that the Bureau will place “particular emphasis” on those criteria along with a few others. While obtaining an understanding of potential benefit is important and appropriate, the Bureau should take steps to ensure that it does not become a means for the Bureau to stand in place of the market.
The best way to assess whether a product or service is beneficial is to allow people, through an open market, to decide for themselves the product or service’s value. Just because the Bureau does not see the value in a proposed product or service does not mean that potential customers, who may have different needs or preferences than the relevant Bureau employees, will not find a product valuable. So long as the firm is able to adequately compensate users for legally cognizable potential harm (which is a separate evaluation criterion), the Bureau should not deny access to a NAL or the Sandbox simply because Bureau employees do not find the applicant’s value proposition compelling.
Protecting Markets and Competition
The NAL and Sandbox present the Bureau with something of a paradox: the NAL and Sandbox should help firms that seek appropriate regulatory relief without being so much of a benefit that those firms enjoy an undue competitive advantage. This is a particular risk to the extent that resource limitations prevent the Bureau from providing all similarly situated competitors the opportunity to obtain simultaneous relief. While a decision on whether relief is appropriate inherently depends on specific facts and circumstances, and relief therefore cannot and should not be handed out without particularized analysis, there are changes the Bureau can make to its proposal that would help mitigate the risk that a firm obtaining relief through the NAL, and particularly the Sandbox gains a significant competitive edge. In particular, the Bureau should do the following: