The Consumer Financial Protection Bureau is joining a cooperative of global regulators intended to bring more international collaboration to the regulation of fintech firms.
The bureau on Tuesday announced the creation of the Global Financial Innovation Network for regulators to discuss joint policy work and offer a cross-border product testing process for innovation-focused companies.
"The network will seek to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas," the CFPB said in a press release. "It will also create a new framework for cooperation between financial services regulators on innovation-related topics."
The CFPB said is it working in collaboration with 11 financial regulators and "related organizations." It is the only U.S. regulator involved in the network so far.
The CFPB released the network's 21-page consultation document as the group seeks input on its mission statement, proposed functions and where the network should prioritize its work. The CFPB said "interested parties" in the U.S. can provide feedback to the agency's Office of Innovation.
“We look forward to working closely with other regulatory authorities — whether in the United States or abroad — to facilitate innovation and promote regulatory best practices in consumer financial services,” acting CFPB Director Mick Mulvaney said in the press release. “Joining the Global Financial Innovation Network demonstrates the Bureau’s commitment to promoting innovation by coordinating with state, federal and international regulators.”
The idea for the creation of a global network emerged after the United Kingdom's Financial Conduct Authority, one of the group's members, released a white paper in February describing a so-called "regulatory sandbox" in the U.K. A key goal identified by regulators is to more quickly bring new technologies and products to markets but with an adequate regulatory regime to monitor risks.
A key focus of the global network would be the creation of an application process for cross-border testing.
Emerging technologies and services with cross-border applications include artificial intelligence, distributed ledger technology, data protection, regulation of securities and Initial Coin Offerings, and know-your-customer and anti-money-laundering technologies.
The CFPB said the global network's working group will engage with interested parties across different jurisdictions in the next two months. The group wants feedback by Oct. 14. The CFPB said commenters "should be aware" that comments submitted to the CFPB may be subject to release under the Freedom of Information Act.
In addition to the CFPB and FCA, the working group includes the Abu Dhabi Global Markets; Autorité des marchés financiers, in Québec; Australian Securities & Investments Commission; Central Bank of Bahrain; Dubai Financial Services Authority; Guernsey Financial Services Commission, in the Channel Islands; Hong Kong Monetary Authority; Monetary Authority of Singapore; Ontario Securities Commission; and Consultative Group to Assist the Poor, a Washington, D.C.-based group that seeks to advance financial inclusion.