The Consumer Financial Protection Bureau will consider the scale of violations as it makes enforcement actions against companies, CFPB Acting Director Mick Mulvaney said at an industry event in Washington, D.C., today. “Twelve thousand out of 3.5 million [transactions] is not that many,” Mulvaney said in a hypothetical example. “And so the question then becomes, is this systematic, is it intentional? So we are going to start to look at that.”
Releases from the CFPB before Mulvaney became acting director would often emphasize the absolute number of violations without describing the overall size of a particular market. “Based upon the information that’s given to me, [the rate] was not relevant in the past, but I think it should be,” he explained. In one case, for example, a report highlighted 21,000 credit card complaints in 2016, a number that represented a 0.006 percent rate of complaints per open credit card account.
In the same speech, Mulvaney announced that the CFPB is developing a “fintech sandbox” to facilitate testing for financial innovations. “We recognize that so often the case with new technology, there is a needle you have to thread,” he later told American Banker. “If you don’t give any regulation at all, it has the chance to go off the rails and completely burn itself out, which is where I was fearing bitcoin was going to a couple months ago if they haven’t already. And at the same time, if you over-regulate, you sort of tamp down that creativity and you discourage the innovation.”