Merchant Innovation

CFPB Clarifies Innovation Policy

CFPB regulation

The Consumer Financial Protection Bureau said Thursday (Feb. 18) that it has “finalized a policy to facilitate consumer access to financial products and services that promise substantial benefit to consumers.”

The bureau said in a release that its policy sets up a process for companies to apply for a statement through the CFPB that would “reduce regulatory uncertainty” tied to new products or services and would create opportunities for consumer-friendly innovation. The final policy takes its cue from proposals dating back to 2014.

Created as part of the CFPB’s Project Catalyst initiative, the policy is aimed at regulatory compliance, allowing for reconsideration in light of the fact that new usages or technologies may not have existed or even have been contemplated at the time regulations were enacted. The letter that would be administered would be known as a “no-action” letter and would indicate that there is no present mindset or intention to initiate supervisory action. The letters will be nonbinding and can be revoked. Histories of applications and no-action letters handed down will be posted on the CFPB’s website.

Should additional information be deemed necessary, said the CFPB, such information would have to be produced to satisfy the no-action letter designation, and that designation would not be a waiver of compliance of laws or regulations. Established firms may apply for the letters, but startups may as well, the CFPB said in its announcement.

In a statement accompanying the news of the new initiative, CFPB Director Richard Cordray said: “This new policy is designed to improve access to consumer financial products and services that promise substantial consumer benefit. We want to foster a consumer financial marketplace where companies develop safe, innovative products and approaches that can help make people’s lives better.”


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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 AML/KYC Report, Zillow’s Justin Farris tells PYMNTS how the platform incorporates stringent authentication without making the onboarding and buying experiences too complex.