CFPB Opens Office of Competition and Innovation to Promote Competition in Financial Services
The Consumer Financial Protection Bureau (CFPB) recently announced that it would be opening a new office “to help spur innovation in financial services by promoting competition and identifying stumbling blocks for new market entrants.” The Bureau said that the new office, named the Office of Competition and Innovation, would replace a previous effort to “confer special regulatory treatment on individual companies.”
“Competition is one of the best forms of motivation,” said CFPB Director Rohit Chopra in a press release announcing the new office. “It can help companies innovate and make their products better, and their customers happier. We will be looking at ways to clear obstacles and pave the path to help people have more options and more easily make choices that are best for their needs.”
According to the press release, the new office will support the CFPB’s efforts to remove obstacles from open markets, increase the bureau’s understanding of how large players push smaller players out of the ecosystem, host incubation events, and make the process of switching financial providers easier.
In 2014 and 2018 respectively, the Bureau launched Project Catalyst and the Office of Innovation. The new office replaces both of those initiatives.
“The 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,” the press release reads. “After a review of these programs, the agency concludes that the initiatives proved to be ineffective and that some firms participating in these programs made public statements indicating that the Bureau had conferred benefits upon them that the Bureau expressly did not.”