The Consumer Financial Protection Bureau launched a new effort to urge the introduction of more innovative "consumer-friendly" financial products and services, the bureau announced yesterday. The initiative, called Project Catalyst, aims to connect with innovative financial companies and entrepreneurs through a website community that will provide access and communication between businesses and the bureau.
"In the run-up to the crisis of 2007-2008, innovation in consumer finance too often meant the creation and promotion of products that obscured costs and risks from consumers," Richard Cordray, the bureau's director said in prepared remarks yesterday. "We believe that good, consumer-friendly innovation holds great potential for achieving our mission of making the consumer finance market work again for consumers. We want to help as much as we can to stimulate innovation in financial products and services."
As part of the first phase of the project three companies had agreed to share anonymized consumer data with the bureau to help it understand shifts in consumer behavior, according to the bureau's statement. BillGuard will share data from its billing dispute services to aid the bureau in observing trends in customer complaints, while Plastyc, an alternative banking service, will share depositing and account access data. And Simple, another alternative banking service, will provide data that the bureau said will help gain insight into consumer spending and saving trends.
The bureau also said that it regarded Project Catalyst as an effort to fulfill its Dodd-Frank mandate to increase transparency and innovation in financial products and services. The bureau added that the the initiative will help in formulating regulations for emerging products and services that regulators haven't addressed yet.