Our guest for this week’s podcast is Paul Watkins, Director of the CFPB’s Office of Innovation.  Paul formerly worked in the Arizona Attorney General’s office where he was in charge of fintech initiatives and led the state’s successful efforts to create the first “regulatory sandbox” in the United States which allows new financial technologies and products to be tested in a controlled environment with reduced regulatory risk.

The Bureau’s Office of Innovation, which was created under the leadership of former Acting Director Mick Mulvaney, is focused on encouraging consumer-friendly innovation through the creation of policies to facilitate innovation, engagement with entrepreneurs and regulators, and the elimination of outdated or unnecessary regulations.  The Office has taken over the Bureau’s work that was formerly done under Project Catalyst, the initiative launched by the CFPB in 2012 for facilitating innovation in consumer financial products and services.

In this week’s podcast, we question Paul about three recent major Bureau proposals intended to support innovation.  The first is the Bureau’s proposal to revise its “Policy to Encourage Trial Disclosure Programs” (TDP Policy), which sets forth the Bureau’s standards and procedures for exempting individual companies, on a case-by-case basis, from applicable federal disclosure requirements to allow those companies to test trial disclosures.  The second is the Bureau’s proposed revisions to its 2016 final policy on issuing no-action letters (NAL Policy).  The third is a proposal by the Bureau to create a new “BCFP Product Sandbox.”

The issues we discuss with Paul include the key differences between the revised TDP and NAL Policies and the current Policies, the background and objectives of the BCFP Product Sandbox, confidentiality concerns, the scope of protections from liability, and the Office’s efforts to coordinate with other regulators.

To listen to the podcast, click here.   (To listen to our earlier podcast in which we discussed Arizona’s sandbox with Evan Daniels, Fintech Counsel in the Arizona Attorney General’s office, click here.)