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The CFPB released a proposed policy Thursday for authorizing case-by-case testing of new consumer disclosures by individual institutions, including credit unions, banks and other service providers.

This Project Catalyst initiative implements the bureau's authority under the Dodd-Frank Act. The bureau is undertaking the initiative to encourage banks, credit unions, and other financial services companies to propose and conduct trial disclosure programs.

"As part of our efforts to foster innovation in consumer financial markets, the proposed policy will allow companies to conduct real world trials of disclosure alternatives," said CFPB Director Richard Cordray. "That will help the Bureau identify what works and does not work to provide consumers with the clear information they need to make financial decisions in a marketplace of evolving programs and products."

Project Catalyst was launched in November. This program is designed to encourage consumer-friendly innovation in markets for consumer financial products and services.

Under Thursday's proposed policy, the CFPB would approve individual firms for limited-time exemptions from current federal disclosure laws so they can research and test informative, cost-effective disclosures. The companies involved will then share the results of their trial disclosure with the CFPB.

The bureau would use that information to improve its disclosure rules and model forms. The public will have input through the rulemaking process, it said.

The bureau would evaluate institutions' proposed disclosure trials for their contribution to consumer understanding, the development of more cost-effective disclosure rules or policies and mitigation of risk for consumers.

Comments on the proposal will be due 60 days following publication in the Federal Register.

• Proposal
• CFPB announcement