Insights

Jones Day Participates in CFPB's Project Catalyst Launch

The Consumer Financial Protection Bureau ("CFPB") recently launched its latest initiative, Project Catalyst. According to CFPB director Richard Cordray, Project Catalyst was designed to "encourage innovation in consumer finance" by targeting two goals—communication and collaboration between the agency and the marketplace. First, the CFPB seeks to communicate generally with the consumer finance industry to help the agency understand how current and future regulation affects consumer-friendly product innovation. Second, the CFPB hopes to collaborate with the industry through data-sharing and involvement at the product level. For instance, the project seeks collaboration between the CFPB and market participants on disclosure testing for new products.

As one of the country's leading payment systems lawyers, Jones Day's Veronica McGregor was invited to the participate in the project's official launch in November. Ms. McGregor participated in discussions with the agency, investors, entrepreneurs, and others representing the "innovator community," as characterized by Mr. Cordray, including representatives from large companies, such as Google, PayPal, and Facebook, as well as smaller businesses. Ms. McGregor reports that the agency was seeking "useful information to inform their task of developing a plan to deal with companies that fall into the gray area of regulation while still protecting consumers." Through informal discussions, the CFPB sought input in several areas, including mobile payments, student lending, emerging trends, and short-term liquidity.

At the meeting, Ms. McGregor observed that the CFPB was particularly interested in whether the balance of adequate customer protection and innovation is better served through proscriptive or descriptive regulations. And whether—within those regulations—the CFPB should be specific or provide general outlines. Further, Ms. McGregor notes that Project Catalyst appears appropriately focused on practical discussions with industry leaders to guide regulation. In fact, the discussions were led by moderators representing the industry, not the CFPB. As a continuation of the project launch, the CFPB expects to make its staff available on a regular basis for "office hours," giving market participants an opportunity to engage the agency.

The collaboration sought by the CFPB may require communication of sensitive information to the agency. In an effort to curb any concern over public disclosure, the CFPB states on its web site that it will not voluntarily release information provided through Project Catalyst. The CFPB mentions that the information may be subject to the Freedom of Information Act, but the agency announced that it will assert exemptions for trade secrets, confidential commercial information, and personally identifiable information where appropriate. Companies looking to discuss new, or existing, financial products with the CFPB should seek advice from counsel and, if possible, specific assurances from the CFPB before disclosing sensitive information.

Jones Day's Consumer Financial Products & Services team advises clients on regulatory issues, including counseling clients regarding interaction with the Consumer Financial Protection Bureau.

Lawyer Contacts

For further information, please contact your principal Firm representative or one of the lawyers listed below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com.

David F. Adler
Cleveland
+1.216.586.1344
dfadler@jonesday.com

Jeremy P. Cole
Chicago
+1.312.269.4093
jpcole@jonesday.com

Antonio F. Dias
Pittsburgh / Washington
+1.412.394.7240 / +1.202.879.3624
afdias@jonesday.com

Gregory R. Hanthorn
Atlanta
+1.404.581.8425
ghanthorn@jonesday.com

Jonathan Leiken
Cleveland / New York
+1.216.586.7744 / +1.212.901.7256
jleiken@jonesday.com

Sydney McDole
Dallas
+1.214.969.3785
sbmcdole@jonesday.com

Veronica K. McGregor
San Francisco
+1.415.875.5744
vmcgregor@jonesday.com

Albert J. Rota
Dallas
+1.214.969.3698
ajrota@jonesday.com

Richard S. Ruben
Irvine
+1.949.553.7565
rruben@jonesday.com

Lee Ann Russo
Chicago
+1.312.269.4283
larusso@jonesday.com

Craig E. Stewart
San Francisco
+1.415.875.5714
cestewart@jonesday.com

Jayant W. Tambe
New York
+1.212.326.3604
jtambe@jonesday.com

Jeffrey L. Mills
Dallas
+1.214.969.4857
jlmills@jonesday.com

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