The bureau would revise existing policy to encourage trial disclosure programs
The Consumer Financial Protection Bureau is seeking to revise existing policy in a bid to encourage trial disclosure programs through the creation of a disclosure sandbox.
The change was proposed by the CFPB’s new Office of Innovation in line with the agency’s statutory mandate to ensure that markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.
Although the current policy was established in 2013, the CFPB has not yet approved any trial disclosures. The existing policy allows the bureau to deem a covered person conducting a trial disclosure program to be in compliance with or exempt from a requirement of a bureau rule or certain federal laws.
While the proposed revision would be based on the same statutory authority as the existing policy, a change would include revisions designed to more effectively encourage companies to test new disclosures. These include streamlining the application and review process to focus on the quality and persuasiveness of the application; granting or denying applications within 60 days of submission; establishing an expected two-year time frame for the testing of disclosures; specifying procedures for permitting companies to continue to use disclosures that test successfully; and coordinating with state regulators so that entities within state regulatory sandboxes may be able to participate in the CFPB’s disclosure sandbox without applying separately to the bureau.
The CFPB announced the creation of the Office of Innovation in July, appointing Paul Watkins as leader of the office. The proposed policy, combined with the bureau joining the Global Financial Innovation Network, is the first action to come from the new office.
