BCFP Launches Regulatory Sandbox for Fintech Companies

| By:

Mick Mulvaney
Acting Director Mick Mulvaney | Photo Credit: Gage Skidmore

Mick Mulvaney, the Acting Director of the Bureau of Consumer Financial Protection (Bureau), told The Wall Street Journal last week that the Bureau has launched a “regulatory sandbox” to help fintech firms develop new products and services.

A regulatory sandbox is a framework set up by a regulator that allows certain fintech companies to conduct experiments for innovative products under the supervision of the regulator. The launch of this BCFP regulatory sandbox coincides with the hiring of Paul Watkins last week as Director of the Bureau’s new Office of Innovation.   

It would seem no coincidence that Watkins was chosen to direct this new office at the Bureau because he had been in charge of fintech initiatives at the Attorney General’s Office in Arizona, the first state to create a regulatory sandbox earlier this year. Illinois is the process of creating a regulatory sandbox. And state banking regulators in New England spoke to deBanked last year about the possibility of a regional regulatory sandbox. According to an American Banker story, the model for the sandbox follows a 2014 initiative in the UK called Project Innovate, designed to promote competition while focusing on consumer interests. Currently, regulatory sandboxes have been implemented in other countries, including Abu Dhabi, Australia, Canada, Denmark, Hong Kong and Singapore, according to the New York University Journal of Law and Business.

Regulatory sandboxes are controversial. Before the Arizona bill passed allowing for the creation of the regulatory sandbox, a number of consumer advocacy groups protested, including the Southwest Center for Economic Integrity, Arizona Community Action Association, Children’s Action Alliance, and Protecting Arizona’s Family Coalition. These groups believe that the regulatory sandbox is simply a way of allowing fintech companies to bypass regulations at the expense of consumers.      

Mulvaney wouldn’t agree. “You can make a strong argument…that new technology actually offers new and innovative ways to protect consumers,” Mulvaney said in The Wall Street Journal story.

Last modified: July 23, 2018
Todd Stone

Category: Regulation, Uncategorized

Home Regulation, Uncategorized › BCFP Launches Regulatory Sandbox for Fintech Companies

    Pearl Capital

    Key Capital Group


    Highland Hill Capital

    National Funding


    Balboa Capital

    Idea Financial

    Smart Business Funding

    ROC Funding Group

    Fox Business Funding

    Velocity Capital Group

    SOS Capital

    Lending Valley

    One Percent Ventures

    Hunter Caroline

    Splash Advance

    Better Accounting Solutions

    South End Capital


    Bitty Advance


    Queen Funding



    Infusion Capital Group

    Thor Capital Group