CFPB Announces the Opening of the Office of Competition and Innovation
The CFPB recently announced its plan to open the Office of Competition and Innovation which will replace the Office of Innovation and its Project Catalyst. In the press release covering the announcement, the CFPB explains that this new office is “part of a new approach to help spur innovation in financial services by promoting competition and identifying stumbling blocks for new market entrants.”
The CFPB is mandated by statute “to promote fair, transparent, and competitive markets.” CFPB Director Rohit Chopra explains that “[c]ompetition is one of the best forms of motivation. It can help companies innovate and make their products better, and their customers happier.”
The previous Office of Innovation’s “primary purpose was to process applications for No Action Letters and Sandboxes that applied to an individual company’s specific product offering.” Upon review, the CFPB deemed the prior method to be ineffective.
According to the announcement, the new office will further the CFPB’s general goal to increase competition by, among other things:
- Enabling consumers to switch providers;
- Researching issues within the market structure which hinder innovation;
- Researching how larger players gain competitive advantages over smaller players; and
- Exploring barriers to market entry.
The CFPB is also advising companies, start-ups, and members of the general public to file rulemaking petitions for any rules they consider unclear in order to ensure that their rules effectively apply to everyone competing in the market.
