The new office will:

"Give consumers their walking rights to switch providers" by exploring ways to reduce the barriers to switching accounts and providers. "Competition is more vibrant when people can switch to a new provider easily, creating pressure on incumbents to maintain high levels of service and giving new entrants an opportunity to win customers."
Research structural problems blocking successes. The new office will be housed in the CFPB's Research, Markets, and Regulation division, which the CFPB said will give it "greater access to resources to look at market-structure problems that create obstacles to innovation." For example, the CFPB said this could include greater explorations of the payment networks market or the credit reporting system, both of which are essential to our financial system but have only a few dominant players.
Understand how bigger players can gain advantage over smaller players. "Sometimes start-ups simply get run over by bigger players," the CFPB said. "For example, big companies can easily pitch new products to their large customer bases and stymie outside players who may have more favorable products. Big tech companies, with their huge reaches, are also seeking new ways to join consumer finance markets and may threaten fair competition."
Identify ways to address commonplace obstacles. "Innovators may not be getting their products or services to market because of more practical problems like access to capital or talent. Or they may not launch because they don't have access to the large volumes of digital data stored by the big banks. A future rulemaking by the CFPB under Section 1033 of the Consumer Financial Protection Act will give consumers access to their own data," the CFPB said.
Host events to explore barriers to entry and other obstacles. The CFPB said the new office will hold open houses, sprints, hackathons, tabletop exercises, war games and other events. "Entrepreneurs, small business owners and technology professionals will be able to collaborate, explore obstacles and share frustrations with government regulators. Results will be shared publicly," the CFPB said.

In addition to replacing the Office of Innovation, which opened in 2018, the Office of Competition and Innovation replaced the Project Catalyst, which launched in 2014. The Office of Innovation's primary purpose was to process applications for No Action Letters and Sandboxes that applied to an individual company's specific product offering.

Instant Insights /

CFPB Launches Office to Spur Competition in Financial Services

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