The Consumer Financial Protection Bureau (CFPB) is a self-proclaimed 21st century agency. They back this up with activities like Project Catalyst, which yesterday released its first-ever Innovation Highlights Report.
You can access the full report here.
CFPB Director Cordray also spoke Sunday night at the Money 20/20 conference about promoting consumer friendly innovation. He said,
“One of Project Catalyst’s top priorities is to engage closely with companies, entrepreneurs, and other stakeholders who are at the front lines of innovation… To help facilitate access and innovation, the Consumer Bureau launched Project Catalyst four years ago. Back then, this initiative was a novelty for a banking regulator, both here and around the world. We have since had many discussions with our counterparts in Europe and elsewhere, and we share a growing enthusiasm for finding ways to leapfrog forward to products that are more accessible, more affordable, more convenient, and more empowering of consumers."
He highlighted the following developments:
- Expanding access to credit
- Supporting safe consumer financial records access
- Better cash-flow management
- Increasing options for student loan refinancing
- Modernizing mortgage servicing platforms
- Improving credit reporting engagement
- Improving peer-to-peer money transfers
- Supporting consumer savings
Project Catalyst also oversees the Bureau’s “trial disclosure waiver” policy which is intended to support pilot testing of new innovative disclosure approaches that could promote transparency and improve consumer understanding, as well as its “no-action” letter policy, which is designed to reduce potential regulatory uncertainty for innovative products that promise significant consumer benefits.
We at insideARM applaud the CFPB’s focus on innovation. We have also recognized the reality (irony?) that the Bureau’s actions are encouraging innovation in all areas… except debt collection. In that area, the actions and potential rules seem to be taking the country backwards, reinforcing the use of snail mail, and not providing sufficient guidance for the use of modern technology. Some would say that the outline of proposed rules presumes the use of email, or possibly other methods of communication, assuming one has consent. But the method of gathering and managing that consent is the devil in the details. Basically, you’ve got to get consent through one of those methods with which consumers generally refuse to engage.
Also worth mentioning here is the fact that the clock is being turned back in the area of calling on the telephone too. While this is the purview of the Federal Communications Commission and not the CFPB, the latest innovation in dialing produced by the recent rules is basically… wait for it… the rotary phone.
We too are focused on innovation. To this end, The iA Institute (publisher of insideARM) is in the process of forming an Innovation Council to leverage the collective imagination of big thinkers from across – and outside - the ARM industry, including creditors, collectors, and technology organizations. The Innovation Council will work closely the Consumer Relations Consortium, also managed by The iA Institute, to develop ways to address emerging regulations, better serve consumers, and still manage to remain profitable. If you think you can contribute, please get in touch.