The CFPB has announced a new project as part of its Project Catalyst initiative, which the CFPB describes as ” designed to encourage consumer-friendly developments in markets for consumer financial products and services.” The new project is a research pilot to examine the effectiveness of early intervention credit counseling for consumers who are at risk of default on their credit card debt. Project Catalyst was launched in November 2012, at which time the CFPB discussed its plans to use the initiative to establish lines of communication with innovators who may be affected by the CFPB’s regulations, understand new and emerging products to be prepared to make necessary regulatory changes, and engage with innovators to better understand which existing laws work and do not work for innovators.
According to the CFPB, as part of the new project, two institutions, one described as a “global credit card issuer” and the other as a “consumer credit counseling service provider based in Philadelphia,” have agreed to share insights with the CFPB from a credit card credit counseling trial project that will offer early-intervention credit counseling to consumers at risk of defaulting on their credit card debt. The CFPB indicates that this research may also help inform whether similar strategies could be effective for consumers facing default on other products such as home, auto or other loans. The CFPB states that it plans to de-identify the information shared by the two institutions and take “appropriate precautions…to ensure that individual consumers cannot be identified through the data.” The CFPB’s research questions and goals are set forth in a summary that accompanied the CFPB’s announcment.