THE BCFP’S SANDBOX

On September 10, 2018 the Bureau of Consumer Financial Protection (BCFP) proposed to create a Disclosure Sandbox through its revised Policy to Encourage Trial Disclosure Programs (Policy or TDP Policy), which is intended to carry out the BCFP’s authority under Section 1032(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act). Comments will be received until October 10, 2018.

The BCFP believes that there may be significant opportunities to enhance consumer protection by facilitating innovation in financial products and services through enabling responsible companies to research informative, cost-effective disclosures in test programs. The BCFP also recognizes that in-market testing, involving companies and consumers in real world situations, may offer particularly valuable information with which to improve disclosure rules and model forms. The Policy implements the statutory requirement to issue standards and procedures for trial disclosure programs and is designed to encourage financial services companies to innovate by proposing and conducting such programs, consistent with the protections for consumers described in the Policy.

One hopes that the plan creates an environment where program participants developing new options for consumer disclosures can play creatively and safely, like kids in a sandbox, rather than an environment that program participants, under the auspices of the BCFP, use like a cat.

A copy of the proposed policy guidance is available at:  https://www.gpo.gov/fdsys/pkg/FR-2018-09-10/pdf/2018-19385.pdf

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