WASHINGTON — With financial institutions worried the Consumer Financial Protection Bureau will hinder business innovation, the agency on Wednesday argued that one of its mandates is the exact opposite.
The bureau unveiled a new outreach effort related to startup financial companies, called Project Catalyst. The bureau, which will initially collect data on the business practices of three alternative firms, says the new project is meant to satisfy one of its charges from Congress under the Dodd-Frank Act: to encourage financial innovation to benefit consumers.
"At its bedrock, a vibrant marketplace not only mirrors how people actually live their lives, but envisions how they might want to live even better – perhaps with more certainty, or more convenience, or more impact," CFPB Director Richard Cordray said in remarks prepared for a speech in Mountain View, Calif.
As part of the initiative, three companies will share with the CFPB new trends about consumer behavior. They include BillGuard, a company that helps consumers quickly identify questionable credit or debit card charges and resolve any payment disputes. The firm will share data meant to help the CFPB track trends in customer complaints. Plastyc, a provider of prepaid cards and other electronic-based banking services, will provide data on the benefits of new methods for depositors to have quick access to funds. Simple, which offers similar alternative banking services, will collaborate on CFPB efforts to understand tools encouraging saving.
"Through this project, the CFPB will be engaging more closely with companies and entrepreneurs who are at the front lines of innovation," Cordray said.