CFPB reaches out to innovators

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The CFPB has announced the launch of “Project Catalyst,” which it describes as “an initiative designed to encourage consumer-friendly innovation and entrepreneurship in markets for consumer financial products and services.” To introduce the project, the Bureau held a program yesterday in Mountain View, CA at which presentations were made by Director Richard Cordray, Deputy Director Raj Date, and various “thought-leaders” who included representatives from companies that, according to the CFPB’s press release, have agreed to share anonymized data about consumer behaviors and trends with the CFPB.

The CFPB says that it plans to use the project to establish lines of communication with innovators who may be affected by the Bureau’s regulations, understand new and emerging products to be prepared to make necessary regulatory changes, and engage with innovators to better understand which existing laws work and do not work for innovators, and why.  The CFPB reports that they recognize that consumers may be better off with innovative approaches that presently do not necessarily conform with existing law.

The CFPB has also established a new “Project Catalyst” page on its website and invites innovators to contact the CFPB by e-mail to suggest improvements to financial regulations that could foster consumer-friendly innovation or to express interest in collaborating with the CFPB and/or launching a pilot project to develop and test a new market idea. The CFPB indicates that it would be helpful for someone sending such an e-mail to include identifying information such as the name of his or her company, background and management bios, as well as information about his or her idea, including a description, the stage the idea is in, the barriers it faces, how it fits in Project Catalyst, and  its benefits and risks for consumers. The CFPB states that it will not voluntarily disclose information provided to Project Catalyst unless the provider agrees in writing or it is required by law.

We see Project Catalyst as a worthwhile initiative because of its potential to help the CFPB understand the need to make changes to existing regulations that will promote, instead of chill, the development of new technologies and other innovations that will improve the consumer financial services marketplace for consumers and business alike.

Published In: Administrative Agency Updates, General Business Updates, Consumer Protection Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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