The Client Monetary Safety Bureau (CFPB) is establishing a brand new workplace to assist it perform its mandate of selling truthful, clear, and aggressive monetary providers markets.
The Workplace of Competitors and Innovation, as the brand new unit known as within the CFPB announcement, shall be tasked with serving to to spur innovation within the monetary providers {industry} in the US. It can do that by concurrently selling competitors and figuring out obstacles confronted by new market entrants to deal with them.
The brand new unit replaces the Workplace of Innovation, which was targeted on an application-based course of to confer particular regulatory remedy on particular person corporations. The CFPB says this strategy to the market has been extremely ineffective and raised new challenges, therefore the necessity for the pivot.
“After a evaluate of those applications, the company concludes that the initiatives proved to be ineffective and that some corporations collaborating in these applications made public statements indicating that the Bureau had conferred advantages upon them that the Bureau expressly didn’t,” the CFPB press launch stated.
The foundations the brand new unit will make will apply to “all corporations available in the market.” The discharge additional famous that the CFPB is open to options from corporations, startups, and members of the general public within the rulemaking course of.
The CFPB could possibly be digital foreign money corporations
The CFPB doesn’t explicitly point out digital currencies and has not been concerned with the market. Nevertheless, the transfer, together with different current CFPB actions, could also be setting the stage for the physique to play a extra outstanding position within the digital foreign money market.
Final month, the CFPB launched a notice that it was invoking the Dodd-Frank Wall Road Reform and Client Safety Act of 2010. The long-dormant authorized provision offers the physique authority to control “non-bank” corporations that pose a threat to shoppers.
“Nonbanks should not have a financial institution, thrift, or credit score union constitution; many as we speak function nationally and model themselves as ‘fintechs,’” it stated.
Considerably, the transfer adopted a name from U.S. Senator Elizabeth Warren for the physique to crack down on digital foreign money abuses. Warren instructed Bloomberg that digital foreign money infiltration of the market cuts throughout the CFPB’s jurisdictions additionally.
In the meantime, different shopper protection-focused market regulators, together with the SEC and the CFTC, have additionally been zeroing in on the digital foreign money market.
The case is comparable exterior the U.S. as properly. The U.Okay.’s Monetary Conduct Authority (FCA) lately warned shoppers in regards to the dangers of investing in digital currencies.
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CFPB establishes new unit to promote fairness in financial services industry
