According to recent reports, the United States now has its own fintech regulatory sandbox, created by the Consumer Financial Protection Bureau (CFPB).
A Testing Ground for New Fintech Products and Services
According to Mick Mulvaney, who is the acting director of the CFPB, companies will be able to use the sandbox for the development and testing of new financial products and services. The sandbox will be led by Paul Watkins, the chief of the CFPB’s Office of Innovation, who led several fintech initiatives as part of the Arizona Attorney General Office.
As per the official announcement, the bureau has set up the Innovation Office to facilitate the development of regulatory frameworks that are consumer-friendly. Additionally, the office will collaborate with fintech firms, entrepreneurs, and regulators, to review the existing regulation and propose amendments.
“My goal was to point it in the trajectory of a gold standard regulator—to be spoken of in the same breath and with the same credibility as the SEC and FDIC (…) Everything we’ve done is pointed in that direction and part of that includes being innovative.”
Sandbox programs have become increasingly popular throughout the world, after the successful deployment of the U.K FCA’s program.
At this moment in time, there are several political issues regarding the CFPB, but it is expected they’ll be solved within the next couple of months. Despite this, firms are free to register on the sandbox and begin beta-testing their fintech products and services.