Fintechs query CFPB’s religion in innovation over ‘secure harbors’

“The fintech business isn’t saying it doesn’t need to be regulated, nevertheless it does need to know what the principles of the highway are,” the particular person stated.

Workplace repurposed

Including to the confusion, the CFPB in Might introduced it was shutting down its Workplace of Innovation, which had been launched through the Trump presidency, and changing it with a brand new Workplace of Competitors and Innovation, which the bureau stated can be a part of a “new strategy to assist spur innovation in monetary providers by selling competitors and figuring out hindrances for brand spanking new market entrants.”

The bureau stated it was shifting away from its prior concentrate on “an application-based course of to confer particular regulatory remedy on particular person corporations.”

The bureau stated it had reviewed its no-action letter and compliance sandbox applications and concluded the initiatives had been “ineffective.” But, later in Might, the CFPB’s press workplace informed Ballard Spahr the bureau hasn’t rescinded its no-action letter and compliance help sandbox applications and that the company remains to be contemplating new and beforehand submitted functions.

“Calling applications ineffective that an company plans to proceed strikes us as an odd method of doing enterprise,” Kaplinsky commented within the June 7 version of his agency’s Shopper Finance Monitor weblog. He wrote that whereas the CFPB could proceed to course of new functions, he expects the bureau’s “disparagement” of the applications “will lead most corporations to reassess whether or not submitting an utility is well worth the funding of time, effort, and price required to take action.”