Mick Mulvaney’s tenure as acting director of the Consumer Financial Protection Bureau (“CFPB” or “the Bureau”), a position he has held since November of 2017, is coming to an end. It is anticipated that President Trump’s nominee, Kathleen Kraninger, will take over as the Bureau’s director once confirmed by the Senate. In a speech to the Women in Housing and Finance group on May 29, 2018, Mulvaney announced that the Bureau is working closely with the Commodity Futures Trading Commission to implement a “regulatory sandbox” that will enable financial technology (“FinTech”) firms to develop new products and services. A regulatory sandbox is a structure allowing FinTech companies to experiment with new tools, data, or business models, while remaining under the supervision of regulators.
In a July 18, 2018 press release, Mulvaney announced that the “sandbox” initiative will be led by Paul Watkins, an attorney appointed by Mulvaney to serve as the head of the Bureau’s newly formed Office of Innovation. The Office of Innovation will examine blockchain technology, cryptocurrencies, peer-to-peer lending, and private currencies. With regard to Watkins’ appointment, Mulvaney stated, “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.” Watkins previously supervised FinTech initiatives for the Arizona attorney general’s office, including its FinTech “regulatory sandbox.” In March of 2018, Arizona became the first state in the country to enact a FinTech regulatory sandbox law, granting companies limited access to the marketplace in exchange for some regulatory relief. Other states like Illinois are currently exploring their own similar sandbox legislation.
This move is not the first time Mulvaney has openly supported the advancement of blockchain technology. In September of 2016, Mulvaney, together with Representative Jared Polis, created the bipartisan Congressional Blockchain Caucus to oversee the progression of public policy concerning cryptocurrencies and other blockchain technologies.
In light of Mulvaney’s impending departure, it is too soon to tell whether promoting the development of FinTech will remain a priority for the Bureau in his absence.