CFPB considers innovative approaches to regulation
The CFPB today published a request for information (RFI) seeking input on how it can use "Tech Sprints" to "encourage regulatory innovation and collaborate with stakeholders in developing viable solutions to regulatory compliance challenges."
NAFCU recently released a whitepaper that charts a path forward for regulatory coordination in order to achieve an even playing field between traditional financial institutions and fintech companies. The whitepaper addresses ways the CFPB is already regulating these types of innovation and how it can improve its approach.
The bureau notes in the RFI its "statutory responsibility to regularly identify and address outdated, unnecessary or unduly burdensome regulations in order to reduce unwarranted regulatory burdens," and the role technology plays in improving compliance and supervision.
The RFI also includes background information of other departments and regulators that have successfully used Tech Sprints as a model for collaborative innovation. The sprints bring together regulators, technologists, financial institutions, and subject matter experts to work through problems and find innovative solutions.
Through its potential use of Tech Sprints, the bureau would like to:
- leverage cloud solutions, machine automated compliance checks that allow for independent validation by regulators, and other developments that may reduce or modify the need for regulated entities to transfer data to the CFPB;
- continue to innovate Home Mortgage Disclosure Act (HMDA) data submission, processing, and publication to help ease burden, increase flexibility, and resolve compliance challenges;
- identify new technologies and approaches that can be used by the bureau to provide more cost-effective oversight of supervised entities;
- explore other technological approaches to robust and secure data access or exchange; and
- reduce unwarranted regulatory compliance burdens.
The RFI outlines a number of questions the bureau would like specific feedback on from stakeholders. Comments are due to the bureau Nov. 8.
At NAFCU's Congressional Caucus last week, CFPB Director Kathy Kraninger detailed ways the bureau is using its tools to review the examination process for credit unions and balance consumer protections with effective regulations.
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