Professionals in the FinTech, RegTech and payments space gathered on Sunday night for one of the most highly anticipated keynotes at Money20/20 - our team was part of that packed audience.
In his keynote, moderated by COMPLY2016 speaker and FinTech thought leader Jo Ann Barefoot, the Director of the Consumer Financial Protection Bureau (CFPB) Richard Cordray discussed his organization’s most recent initiatives to support FinTech innovation for consumer finance and to curb harmful business practices.
As the issues of regulation and innovation have become two sides of the same coin, Cordray has reiterated that the CFPB is on the side of FinTech companies interested in improving consumer access to credit and payments options. The CFPB’s Project Catalyst, launched four years ago, has encouraged consumer-friendly innovation, allowing many FinTech companies to create solutions that empower consumers.
What the CFPB will not tolerate, though, are FinTech companies that engage in deceptive conduct. Cordray clarified the reasons that the CFPB would carry out enforcement actions against FinTech companies:
(From his prepared remarks) We are not looking to punish anyone merely for raising novel issues that present unsettled points of law or questions that fall into unforeseen cracks in the regulatory framework. Instead, our enforcement actions to date have addressed basic meat-and-potatoes such as companies that promise one thing to their customers and then do something quite different. That is deceptive conduct, and nobody has any privilege to engage in such conduct without putting themselves in legal peril.
The CFPB, as Cordray explained, sees truthfulness as the foundation of good business practices and will crack down on companies that mislead consumers about their products and services. As long as FinTech companies can demonstrate their commitment to transparency and clarity, it seems the CFPB will give them the green light to continue innovating now and beyond.
In other CFPB news, the agency released a monthly complaint snapshot, this time spotlighting prepaid cards. Consumers who rely on prepaid cards to access their spending money frequently face problems with unauthorized transactions and stolen funds. Ease of consumer access and control over their prepaid cards remains a top priority for the CFPB.
View our recent analysis of the CFPB’s Consumer Complaint Database and the risk signals company’s need to be on alert for:
As a RegTech company, we support FinTech and Payment companies who want to solve regulatory and compliance requirements more effectively and efficiently through our cloud-based platform.
To see Richard Cordray’s full prepared remarks at Money20/20, view the CFPB’s press release here.