New CFPB Program Encourages Innovation on Financial Products

Yesterday, the Consumer Financial Protection Bureau launched a project to encourage consumer-friendly innovation and entrepreneurship for consumer financial products and services.

The initiative, Project Catalyst, is an attempt by the CFPB to give consumers access to fair, transparent, competitive, and innovative markets.

The Bureau wants to be accessible and directly communicate with entrepreneurs and companies that are on the front lines of innovation. The CFPB wants to understand new and emerging financial products so the regulations can evolve with new products. The CFPB seeks to better understand what works and doesn't work for consumers.

"We want to collaborate with innovators seeking to advance consumer-friendly innovation," said CFPB Director Richard Cordray in a statement. "These collaborations help us better understand what works and does not work to improve life for consumers in the marketplace."

The Bureau is establishing a website which it hopes will increase access and communication between the CFPB and the innovators.

The CFPB is seeking data to learn more about consumers to make informed policy decisions. In the first phase of the initiative, three companies will share anonymous data about trends and consumer behavior. Simple, an alternative to traditional banking, will provide data about spending habits and saving. BillGuard will share billing dispute data with consumer complaint and complaint resolution information. Plastyc, another alternative to traditional banking, will give data about the importance of easy depositing procedures and having immediate access to funds.

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