On July 18, 2018, Consumer Financial Protection Bureau (CFPB or Bureau) Acting Director Mick Mulvaney announced that he has selected Paul Watkins to lead the Bureau’s new Office of Innovation. Acting Director Mulvaney recently created the Office of Innovation to focus on encouraging consumer-friendly innovation, which is now a key priority for the Bureau. The work that was being done under Project Catalyst will be transitioned to this new office. In order to fulfill its statutory mandate to promote competition, innovation, and consumer access within financial services, the CFPB states that this new office will focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators, and reviewing outdated or unnecessary regulations.
Watkins comes to the CFPB from the Arizona Office of the Attorney General, where he was in charge of the office’s fintech initiatives. He managed the FinTech Regulatory Sandbox, the first state fintech sandbox in the country, which allows a company limited access to the marketplace in exchange for relaxing some regulations (we previously reported on the Arizona FinTech Regulatory Sandbox). Watkins previously served as the chief counsel for the Civil Litigation Division. In that role, he managed the state’s litigation in areas such as consumer fraud, antitrust, and civil rights. Previously, Watkins practiced at Covington & Burling LLP in San Francisco and Simpson, Thacher & Bartlett LLP in Palo Alto, Calif.
“I am delighted that Paul Watkins is bringing his deep expertise, track record of protecting consumers, and commitment to innovation to the Bureau,” said Acting Director Mulvaney. “I am confident that, under his leadership, the Office of Innovation will make significant progress in creating an environment where companies can advance new products and services without being unduly restricted by red tape that belongs in the 20th century.”
This news is encouraging as it demonstrates that the regulators are increasingly focused on fostering a regulatory environment that is more fintech and innovation-friendly. This appointment also is a significant tangible development at the federal regulator that directly interfaces with many fintech companies that are involved in the provision or offering of consumer financial services and products. In addition, as we also have previously reported, the Treasury Department is expected to release a report during the next few weeks that will provide some recommendations on financial services regulation, including fintech innovation, and Comptroller of the Currency Joseph Otting has stated that the Office of the Comptroller of the Currency (OCC) will make a decision about whether to accept fintech company applications for special purpose national bank (SPNB) charters sometime later this month.
Stay tuned for further developments!