www.SevillaLocalMedia.com
World-Class SEO
& Digital Marketing Services!

Prepared Remarks of Richard Cordray, Director, Consumer Financial Protection Bureau – LendIt USA Conference

 

 

 

 

 

FOR IMMEDIATE RELEASE:
March 6, 2017

CONTACT:
Office of Communications
Tel: (202) 435-7170

Prepared Remarks of Richard Cordray
Director, Consumer Financial Protection Bureau

LendIt USA Conference

New York, N.Y.
March 6, 2017

I am glad to be with you today to hear firsthand about the latest innovations in consumer financial services. These innovations seem to be generating considerable interest and optimism about the future. They are driving new services for consumers and transforming how they conduct their finances. At the Consumer Financial Protection Bureau, we want to help channel these cutting-edge approaches in positive directions. Our goal is to put consumers first and provide them with more tools to take control of their financial lives. And we want you to share this vision as well.

As many of you know, the Consumer Bureau is the single federal agency with the sole mission of protecting consumers in the financial marketplace. This includes monitoring the rapid changes that new technologies are spurring in transactions, lending, underwriting, and money management, among other things. As we track how these changes evolve, we will be keeping consumers top of mind as this all plays out.

My remarks will focus on three broad areas of special interest to the Bureau. First, our Project Catalyst initiative is familiar to many of you, yet I will begin by describing the approach we take to encouraging consumer-friendly innovations in consumer finance. Second, we are carefully considering the issue of consumer control over their personal financial data. Third, we are looking into the benefits and risks of using unconventional sources of data to underwrite loans as a way to open access to credit for more consumers.

In general, however, I will note two overarching principles that the Bureau seeks to uphold in all these areas. First, we believe in a level playing field for all providers of consumer financial products and services. Evenhanded oversight of all providers – whether they are large banks or fintech startups – is a basic rule of the road for effective regulation of the financial marketplace. Nobody gets a free pass to exploit regulatory arbitrage; everyone must be held to the same standards of compliance with the law. Second, we strongly urge all providers to make sure that consumer protections are built into emerging products and services, right from the start. Consumer protections and compliance should not be mere add-ons or afterthoughts; they must be essential elements of the business model, from beginning to end.

We all have a vested interest in fostering a marketplace where consumers can understand and access the kinds of responsible products they can rely on throughout their financial lives. And the information consumers need to make decisions about their economic opportunities must be accessible, accurate, and reliable. You are in position to play a large role in helping all American consumers achieve key components of this overarching vision.

***

Let me offer an overview of efforts we are making to encourage innovations in the financial marketplace that will lead to products and services that are more accessible, more affordable, and more convenient for consumers. Our major initiative here is our Project Catalyst, which brings us face to face with many of you. It operates on the principle that markets work best when they are wide open to competition from new ideas. As Linus Pauling, who won two Nobel prizes, once said, “The best way to come up with a good idea is to come up with a lot of ideas.”

From early on, we have made it a priority to engage with financial innovators. We are regularly gleaning insights from industry pilot programs, devising policies to promote consumer-friendly innovation, and listening to the hopes and fears of the innovators themselves. Project Catalyst hosts an “Office Hours” program where we engage with startups, nonprofits, banks, and other financial companies. We are learning about what does and does not work for consumers and the potential challenges facing entrepreneurs and investors. If you want to learn more about our programs supporting financial innovation, please join us at a future Office Hours event.

Project Catalyst also conducts research pilot programs with companies both large and small to inform our understanding of emerging issues. To date, these include a pilot to encourage savings and a pilot to improve the effectiveness of early-intervention credit counseling, among others. We continue to receive and review new pilot ideas for consumer-friendly innovations or research questions, and we urge you to consider working with us in this way.

Project Catalyst is also devising new policies to foster innovations. Our Trial Disclosure Waiver Policy allows financial providers to develop new technologies and innovative approaches for designing and testing alternative consumer disclosures. We encourage you to consider working with us to test new disclosures that could promote greater transparency, improve consumer understanding, or reduce costs. Project Catalyst also administers our “no-action letter” policy, which is intended to help promote novel products that may not fit neatly within the existing regulatory structure, yet may yield significant consumer benefits. A no-action letter would state that Bureau staff does not intend to recommend any supervisory or enforcement action based on these particular innovations for a defined period. The purpose of the policy is to mitigate regulatory risk for products that promise substantial consumer benefit, where there is substantial uncertainty about how they may be viewed under existing law.

***

Utilization of data in the financial marketplace is rapidly evolving. Many of these developments are changing and improving the way consumers manage money and direct their financial affairs, but they have not been without risk to consumers. So we want to understand how consumers and third parties are accessing and using that data, and how it fuels new innovations. We also are deeply interested in how consumers are exercising control over their personal financial data, including the data that is maintained by their financial institutions.

Many of these innovations rely on access to current information drawn from the assets, balances, and transactions in people’s financial accounts. These include savings and checking accounts and, for those who have them, investment, mortgage, credit card, auto loan, or student loan accounts. In each case, by helping them budget or obtain credit, the information recorded about them can be a valuable asset. Indeed, it may matter as much or more to their financial situations than the dollars they actually have in their accounts at any given time.

In November, we issued a Request for Information to inquire about the challenges consumers face in accessing, using, and securely sharing their financial records. We seek to identify whether barriers exist between consumers and the personal data that their financial providers maintain about them. And we want to hear solutions from stakeholders that can help address the risks and technological challenges posed by consumers who want to have ready access to this data and to share it electronically with third parties. We are keenly aware of the serious issues around privacy and security, for consumers and providers alike. One pressing issue is how to satisfy the demands of consumers without exposing the providers that maintain this data to undue costs and risks. Another pressing issue is how to prevent consumers from subjecting themselves to undue risks, including the possibility that their data could be misused.

Over the past few months, we have received about 70 comments from financial institutions, data aggregators, companies that use aggregated data, trade associations, consumer groups, and individuals. We are sifting through the comments, which are extensive and thoughtful. They present a wide range of ideas about how best to achieve the broad goals we have in mind.

Certain perspectives presented in the comments are not surprising. Banks and other financial companies raise concerns about consumer data security and offer solutions that may address those concerns. Aggregators and users of the data, by contrast, are recommending less fettered access and greater freedom to store and use the data that consumers permit them to collect. This would give them more flexibility to enhance their services and their business models. Almost everyone is offering justifications that their approach will better protect the interests of consumers. At stake is how consumers can control what data is shared, and whether security or other concerns should restrict how it is shared, with whom, how often, and for what purposes.

So there is much to digest, and we see the market moving quickly, with high stakes for all involved. Even as we speak, vigorous and spirited negotiations are underway throughout the industry that could shape the future of information access. We expect the interests of consumers to be at the forefront of these discussions. Yet we remain concerned about reports of some institutions that may be limiting or restricting access unduly.

For our part, the Consumer Bureau will continue to analyze these issues and closely follow developments. We will take action as needed to make sure that consumers can safely access and share information about their financial lives, that providers and aggregators act in accordance with their instructions, and that financial institutions have their legitimate interests appropriately protected. We recognize that data access makes it possible to realize the many benefits of competition and innovation. We will be drawing heavily on the technological expertise and insight of the various stakeholders, and we will test their arguments and explanations directly against one another. Above all, we will insist that the consumer is the focus, not the football, as this process unfolds. So we look forward to further productive engagement with all parties to find solutions that will put consumer interests first.

***

I also want to update you on our latest actions to encourage the use of new types of data that can open up credit opportunities for more consumers. Computer-enabled data analysis, for example, has the potential to provide greater insights into the financial patterns of the underserved – their inflows and outflows, and the ways they manage the gaps. Thoughtful and responsible use of financial data about individuals could expand the credit available to underserved consumers. If it is possible to expand opportunity in this manner, it would benefit not only these consumers, but perhaps would buoy the economy in ways that benefit us all.

So last month we launched an initiative to learn more about issues raised by new technologies and new uses of data. In particular, we issued a Request for Information about the potential benefits and risks of using, applying, and analyzing unconventional sources of information to predict people’s creditworthiness. We want to know whether various types of this so-called “alternative data” can help more consumers build their credit histories and gain more access to credit.

Just what consumers are we talking about here? As a self-described “data-driven agency,” naturally the Consumer Bureau has dug into the data to gain a deeper understanding. After crunching the numbers, we estimate that 26 million Americans are “credit invisible,” meaning they have no credit history at all. Another 19 million people have credit histories that, under most models, are too limited or have been inactive for too long to generate a reliable credit score.

That means about 45 million adults nationwide fall into these two categories. For every one of them, managing the ways and means of their lives usually costs more, risks more, takes longer, and does less to build their financial futures than is true for most consumers. That is simply a tragedy in a modern economy and a modern financial system like ours, and we all need to think harder about what we can do to address it. Certain longstanding products, such as secured credit cards, can provide part of the answer and should be actively offered to these consumers.

As many of you are well aware, alternative data may draw from sources such as rent or utility payments, which in general have not been traditionally defined as “credit.” It may draw from electronic or other records of transactions, such as deposits, withdrawals, or account transfers. And it might include other personal information, such as the consumer’s occupation or educational attainment. Other forms of alternative data may spring from new sources that never existed before, such as the use of mobile phones or the Internet. By filling in more details of people’s financial lives, this information may paint a fuller and more accurate picture of their creditworthiness. So adding alternative data into the mix may make it possible to open up more affordable credit for millions of additional consumers.

Through a Request for Information issued last month, we are looking at the pros and cons of using the types of alternative data available today, and what the future may hold as technologies continue to evolve. We are looking at how this information is gathered and analyzed in the underwriting models now used by banks and other financial companies, including the fintech companies. And we are seeking to better understand how all of this is beginning to unfold.

Some of the main inquiries we posed are these. First, can the use of alternative data to create or augment individual credit scores increase access to credit for consumers by helping lenders better assess their creditworthiness? Second, will this lead to more complex lending decisions for both industry and consumers, and what risks would that pose? Third, how might the use of alternative data, new modes of analysis, and new technologies affect costs and services in making credit decisions? Certainly it could mean a faster application process, lower operating costs for lenders, and lower loan costs for borrowers, all of which could benefit consumers. Fourth, what forms of alternative data might be prone to errors, and how hard will it be for consumers to identify such errors and get them corrected? Finally, and quite significantly, how may the use of alternative data affect certain groups or behaviors in ways that might run afoul of the fair lending laws or create other risks for vulnerable consumers?

We are hearing from innovators who want to expand access to credit or offer credit at lower interest rates to borrowers whose credit scores may understate their ability and willingness to repay. And we see promise in some consumer-friendly innovations that bring new products to those who had been locked out or underserved by the banking system and existing credit models. These approaches also pose risks, and we want to know more about these risks and how they can be mitigated or minimized. On the whole, we are encouraged by the potential for alternative data underwriting to benefit the very consumers that the fair lending laws are designed to protect. So we welcome you all to the frank and wide-ranging discussion we have begun on this subject. We are eager to hear your experiences and perspectives, and we encourage you to reach out to us.

***

We will continue to engage with you and others to work through these issues. As we want to make clear, everyone who provides consumers with financial products and services must adhere to the same standards and be held accountable under the law. So as we move forward, we will have one eye on protecting consumers and the other on encouraging innovations to improve their lives. As is always the case, the long-term interests of your businesses depend on delivering great value and customer service. In these ways, our goals intersect. So let us travel this course together, and consider how we can direct our paths toward a better world for many millions of American consumers. Thank you.

###

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Subscribe!

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 3,676 other subscribers

Upcoming Live Music

No shows booked at the moment.

Featured: Guitarist Gloria Estrada & Viento Callejero

Susie Garcia & Las Colibri

Follow me on Twitter

RSS Alexa Blog

  • Fix Keyword Cannibalization To Prevent Hidden SEO Issues
    All of your SEO efforts are executed with the goal of making your site easier for Google to crawl and understand. In theory, the clearer your layout, linking, and schema data are, the more likely you are to reap the benefits of search through higher organic traffic and links. However, even the best SEO professionals […]
  • 3 SEO Problems You’re Probably Not Monitoring
    There are three lesser-known SEO problems that can hinder the success of your site: negative SEO, Google penalties, and keyword cannibalization. An Alexa survey of 17 SEO specialists reveals the impact these issues can have on a site’s search rankings and how to overcome them. Before looking into the SEO problems, it is crucial you […]
  • How to Optimize for Three Types of Buyer Keywords
    To sell products and services, you need to get in the mind of your customers. You need to outline the process, or buyer’s journey, from research through making a purchase. And when your customers are online, you need to know the buyer keywords they use during that process. What Are Buyer Keywords? Buyer keywords are […]
  • How Linux Academy Increased Organic Traffic 84% with Incremental SEO Improvements
    Like most startups, Linux Academy is in a competitive industry. They offer hands-on online cloud training courses on topics like AWS, DevOps, Linux, OpenStack, and more. However, they compete against popular sites that have greater brand awareness because of the broad mix of course topics those sites offer. While the larger brands might have the benefit […]
  • SEO Meta Descriptions: The What, Why, and How
    When it comes to using content to improve the value of a webpage, it isn’t all about the copy on the page. There are also hidden HTML attributes and metadata blurbs you can add to the back end of a webpage to send useful signals to both search engines and users. An important part of […]

RSS Search Engine Watch

  • What is SEM?
    If you are coming to this article as a novice, I know what you are thinking. Not another damned 3 letter acronym! Don’t we have enough?
  • Should I move my WordPress website to HTTPS?
    Website visitors demand secure connections to the websites they are interacting with. HTTPS is an industry best practice, a ranking signal on Google and increasingly becoming the standard for websites. But if you're not of a technical bent, switching your site to HTTPS can seem intimidating.
  • How to create the perfect 404 page
    Optimizing your 404 page is unlikely to top your list in terms of digital marketing priorities. However, it’s not something you should overlook or try to rush - especially if your site is frequently changing URLs.
  • How to optimize VR content for search
    Virtual reality (VR) has been the talk of the town for a little while now and its marketing potential is getting difficult to ignore. But despite the clear benefits of VR, businesses are still hesitant about diving in. Can VR content be found using search engines? Is it even possible to optimize virtual reality content […]
  • Baidu SEO: How to optimize for China’s biggest search engine
    Speak to pretty much anyone about SEO and the rhetoric will largely be in regards to the "Big G". But there are countries in the world where Google is not king, and one of them is China. If you want to optimize for the second-largest economy in the world, here's what you need to know […]

RSS Search Engine Land

  • SearchCap: Google AdWords addiction ads, Bing on links & Google Home mini
    Below is what happened in search today, as reported on Search Engine Land and from other places across the web. The post SearchCap: Google AdWords addiction ads, Bing on links & Google Home mini appeared first on Search Engine Land. Please visit Search Engine Land for the full article.
  • Report: Google to debut ‘Home Mini’ smart speaker for $49 on October 4
    The device is Google's answer to the low-cost Amazon Echo Dot. The post Report: Google to debut ‘Home Mini’ smart speaker for $49 on October 4 appeared first on Search Engine Land. Please visit Search Engine Land for the full article.
  • SMX East early bird rates expire Saturday. Register now!
    The sun is about to set on SMX East early bird rates! Join thousands of search marketers and learn the latest SEO and SEM tactics at SMX East, October 24-26 in New York City. Act now for big savings. Here’s what’s in store: 58 sessions, keynotes and clinics featuring proven, actionable tactics on... Please visit Search […]
  • Bing says links are still a very important ranking factor
    A recent interview with a Bing representative suggested links will be downplayed for rankings in the near future. But that is not currently the case. The post Bing says links are still a very important ranking factor appeared first on Search Engine Land. Please visit Search Engine Land for the full article.
  • What SEOs need to know about Baidu in 2017
    Interested in breaking into the Chinese search market? Columnist Hermes Ma shares some recent Baidu updates, along with SEO advice for those trying to rank in the Chinese search engine. The post What SEOs need to know about Baidu in 2017 appeared first on Search Engine Land. Please visit Search Engine Land for the full […]

RSS Local Business Locator Blog

  • CHAM (“Baby Cham”) in Association with Sevilla Local Media – “Money Wine” Release
        Sevilla Local Media, LLC (951) 289-1710 sevillalocalmedia@gmail.com www.sevillalocalmedia.com   For Immediate Release: Sevilla Local Media, a Riverside, California, based Digital Marketing & SEO Company that also manages and promotes a select stable of recording artists, announces an official association with CHAM (Damian Beckett), more famously known as BABY CHAM, specific to marketing, promotion […]
  • Richard Martinez of RISE PROGRAMS: True Love
      RISE PROGRAMS: www.riseprograms.com Featuring Richard Martinez LOVE SUFFERS LONG I have search and read many definitions of LOVE but the Bible to me has the best description of what love looks like. 1 Corinthians 13:4-8 “Love never gives up. Love cares more for others than for self. Love doesn’t want what it doesn’t have. […]
  • SEO Services – NO CONTRACT
    www.sevillalocalmedia.comMonthly SEO Services – NO CONTRACT – Affordable and Guaranteed ResultsSevilla Local Media Fact SheetA few facts about us:We operate on the following business philosophies: a. CUSTOMERS FOR LIFE (our client retention rate is above 95%) – we currently have SEO clients that have been with us since 2009 (Lu Granite + Roley’s Tree Care) […]
  • Help Support This Team – Donations Needed: Norte Vista High School Girls Golf Team
    GREAT CIGAR EVENTS Supports the Norte Vista High School Girls Golf Team!    The Norte Vista (“Novi”) Girls Golf Team is in their 2nd year of existence and self-supportive. They must pay for their gear, practices, league matches and all that is necessary to compete! Help take the burden off of these outstanding female student-athletes […]
  • Granite Fresno – Clovis – Visalia Kitchen & Bathroom Remodeler
      Lu Granite – Visalia and Clovis Kitchen and Bathroom Remodeler Lu Granite – Largest Pre-Fab Granite, Quartz Countertop Company in the Valley!You have made the first step towards realizing your dream kitchen. We offer the lowest prices on Granite & Quartz countertops, kitchen cabinets, Tiles and much more by buying direct and allowing our customers […]

RSS LBL Blogspot Feed

RSS Music Connection

  • Mission: Impossible' Composer Lalo Schifrin’s 85th Birthday Concert September 19, 2017
    Composer, musician, conductor and six-time Oscar nominee Lalo Schifrin (MISSION: IMPOSSIBLE) will celebrate his 85th birthday with a special concert in his honor Oct. 7 at the Alex, 216 N. Brand Blvd in Glendale, CA. Musicians at Play Foundation and AFM Local 47’s Music Fund of Los Angeles are presenting the event in association with Varèse […]
  • Composer Seeking Part-Time Assistant September 19, 2017
    A Los Angeles-based composer and orchestrator who works on independent films and television shows is in search of a part-time assistant. The paid position requires an extensive knowledge of Pro Tools, Sibelius, Vienna Ensemble Pro and Kontakt, a means of transportation, making cue sheets, troubleshooting tech issues, and prep work for recording sessions with the […]
  • Grammy Museum Grants Program Accepting Proposals September 19, 2017
    With funding generously provided by The Recording Academy, the GRAMMY Museum Grants Program awards grants each year to organizations and individuals to support efforts that advance the archiving and preservation of the music and recorded sound heritage of North America, and research projects related to the impact of music on the human condition. Grant funds […]
  • Musical Theater Songwriting Challenge Opens for High School Students September 19, 2017
    To encourage young artists to enter musical theater, the National Endowment for the Arts is expanding its Musical Theater Songwriting Challenge from last year’s three-city pilot to a national program available to all high school songwriters working in any musical genre. Applicants submit a recording of an original song that could appear in a musical […]
  • Dawn Ray'd Sign to Prosthetic Records September 19, 2017
    U.K.-based black metal band Dawn Ray'd have signed to Prosthetic Records. The politically-charged three-piece from Liverpool will release their first full length album, The Unlawful Assembly, on digipack compact disc on Nov. 24, with the digital release hitting all platforms on Oct. 27. Pre-order the CD at smarturl.it/DawnRayd. The LP will be out on Oct. 2 via […]

RSS Political News

  • Rep Senator Makes Obamacare Announcement…Schumer Panics on Social Media September 19, 2017
    One of the GOP senators behind a new plan to repeal Obamacare announced that he has “48 or 49” votes for the plan, sending Senate Minority Leader Chuck Schumer into a tizzy on Twitter. According to The Washington Times, Sen. Bill Cassidy of Louisiana — who co-wrote the latest attempt at health care reform with… […]
  • Watch: Trump Calls Out Iran at UN… Camera Catches Netanyahu’s Priceless Response September 19, 2017
    Prior to President Donald Trump’s highly anticipated speech to the United Nations General Assembly on Tuesday, U.S. Ambassador to the U.N. Nikki Haley said the president’s speech would “slap” those who needed a slap and “hug” those who deserved a hug. In front of the historic global body, Trump didn’t fail to meet the expectations… […]
  • Calif. Lady Moves to Red State, Suddenly Sends Unexpected Message to Lib Friends Back Home September 19, 2017
    Flyover country. Bible belt. Middle America. Coastal elites in liberal cities have all sorts of terms for “red states,” but they all seem to convey one message: Conservative areas of the country are somehow backward and should be avoided. That’s the impression one California writer had about America’s heartland. Leah Singer never imagined that she… […]
  • Here’s the Secret to Mysterious Red-Striped Planes People Have Been Seeing at US Airport September 19, 2017
    If you have ever been at the Las Vegas McCarran International Airport, you may have noticed mysterious planes with red stripes making flights. They come and go on a daily basis, but not just anyone can book a flight on this airline. In fact, you have to have top secret clearance to get a seat… […]
  • Meet the USS Tripoli, the Ship Trump Will Use to Take Out NK September 19, 2017
    The U.S. Navy christened the USS Tripoli on Saturday, unveiling its latest amphibious assault ship that could play a key role in any action against North Korea — it could practically invade the country by itself. In a new twist on traditional amphibious landing cababilities, the Tripoli is thoroughly outfitted with gear to include move… […]
Please wait...

Subscribe to our newsletter

Want to be notified when our article is published? Enter your email address and name below to be the first to know.