[Federal Register Volume 84, Number 181 (Wednesday, September 18, 2019)]
[Notices]
[Pages 49099-49100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20201]


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BUREAU OF CONSUMER FINANCIAL PROTECTION

[Docket No. CFPB-2019-0048]


Request for Information Regarding Tech Sprints

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice and request for information.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) seeks 
comments and information to identify opportunities to utilize Tech 
Sprints as a means to encourage regulatory innovation and collaborate 
with stakeholders in developing viable solutions to regulatory 
compliance challenges.

DATES: Comments must be received by November 8, 2019.

ADDRESSES: You may submit responsive information and other comments, 
identified by Docket No. CFPB-2019-0048, by any of the following 
methods:
     Electronic: Go to http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Email: [email protected]. Include Docket No. 
CFPB-2019-0048 in the subject line of the message.
     Mail: Comment Intake, Office of the Executive Secretary, 
Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, 
DC 20552.
    Instructions: The Bureau encourages the early submission of 
comments. All submissions must include the document title and docket 
number. Because paper mail in the Washington, DC area and at the Bureau 
is subject to delay, commenters are encouraged to submit comments 
electronically. In general, all comments received will be posted 
without change to http://www.regulations.gov. In addition, comments 
will be available for public inspection and copying at 1700 G St. NW, 
Washington, DC 20552, on official business days between the hours of 10 
a.m. and 5 p.m. eastern standard time. You can make an appointment to 
inspect the documents by telephoning 202-435-9169.
    All submissions in response to this request for information, 
including attachments and other supporting materials, will become part 
of the public record and subject to public disclosure. Sensitive 
personal information, such as account numbers or Social Security 
numbers, or names of other individuals, should not be included. 
Submissions will not be edited to remove any identifying or contact 
information.

FOR FURTHER INFORMATION CONTACT: For general inquiries and submission 
process questions, please call Tim Lambert at (202) 435-7523. If you 
require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION: The Bureau has a statutory responsibility to 
regularly identify and address outdated, unnecessary or unduly 
burdensome regulations in order to reduce unwarranted regulatory 
burdens. 12 U.S.C. 5511(b)(3). Technology plays an increasingly 
critical role in financial regulatory compliance. For financial 
institutions, technology is used to assess and address compliance risk. 
Government regulators use technology to help evaluate market risks and 
effectively deploy compliance and enforcement resources. Interactions 
between regulators and financial institutions are facilitated by 
technology in areas such as regulatory reporting, and improvements in 
supervision technology can help to modernize the examination process. 
Finally, the evolution of technologies used in credit markets, while 
potentially increasing access to responsible credit, challenge 
financial institutions and regulators to properly identify and control 
risk.
    In all these areas, regulators are exploring how they can 
effectively engage with financial technology to help keep up with the 
rapidly accelerating pace of innovation. The integration of technology 
and regulatory compliance has the potential to harness technological 
advances to reduce burden, improve results, and create greater 
efficiencies across financial markets that can ultimately reduce 
consumer costs. The expertise of vendors, regulated entities, academia, 
and community groups can help regulators understand the benefits and 
risks of such technology.

Technological Innovation at the Bureau

    Among the objectives established by Congress for the Bureau is to 
facilitate innovation. 12 U.S.C. 5511(b)(5). The Bureau has worked to 
achieve this goal not only in its work with external stakeholders but 
also in its own operations. In developing software, the Bureau has 
adopted open source practices, permitting industry to use its shared 
code, build directly to its specifications, and suggest improvements 
and enhancements to Bureau systems. In regulatory reporting, the Bureau 
created an entirely cloud-based platform for the submission, 
processing, and publication of Home Mortgage Disclosure Act (HMDA) data 
by the Federal Financial Institutions Examination Council (FFIEC), with 
a web-based filing application replacing the former email, fax, paper, 
and electronic-file based system. The Bureau developed the new HMDA 
Platform (https://ffiec.cfpb.gov) through extensive consultations with 
HMDA users with the goal of minimizing burden and cost for both 
regulated entities and government while satisfying all legal 
requirements and increasing overall efficiencies. The new system, 
developed as open source (https://github.com/cfpb/hmda-platform), was 
guided by a philosophy of continuous improvement to avoid rapidly 
outdated software, using a container-based (https://hub.docker.com/u/hmda) microservices approach and modern cloud architectures. The front-
end design incorporated user testing to refine and improve the data 
filing as well as publication capabilities. Regulatory file submissions 
are processed through the HMDA Platform Rule Engine, a translation of 
regulation text to program code, and users are presented with success 
and error results of HMDA ``edits'' during the annual filing process. 
First deployed in 2018, the HMDA Platform requires just one interaction 
with the FFIEC to complete required data filing, replacing an iterative 
process that generally lasted weeks. Additionally, the HMDA Platform 
allows users to produce and export custom data sets rather than relying 
on numerous static reports that few previously accessed. To enable 
external software developers to access some of the key services offered 
by the HMDA Platform, the Bureau publishes Application Programming 
Interfaces (APIs) that can be integrated into external websites, 
analytical tools, and industry software.
    The Bureau has innovated in other areas as well. Bureau regulations 
are available in the form of open source Interactive Regulations, 
making legal requirements easier to read, navigate and understand. The 
Bureau uses machine learning to analyze and interpret consumer 
complaints it receives in order to quickly identify new and emerging 
risks in the consumer

[[Page 49100]]

marketplace. In addition, upon assuming the chairmanship of the FFIEC 
earlier this year, the Bureau's Director identified as a priority the 
issue of data transfer from financial institutions to regulators, and 
is working with the other FFIEC agencies to identify opportunities for 
improvement and burden reduction.
    To guide its efforts to facilitate innovation, the Bureau seeks to 
strengthen its open collaboration with stakeholders in order to work 
together in developing solutions to shared problems. It looks to foster 
an approach that inquires how technology might reshape compliance, 
speed effective interaction between regulators and financial 
institutions, and decrease cost and administrative burden.

Tech Sprints

    The Bureau is exploring Tech Sprints as a model for collaborative 
innovation. Used successfully by the Financial Conduct Authority (FCA) 
in the United Kingdom, Tech Sprints gather regulators, technologists, 
financial institutions, and subject matter experts from key 
stakeholders for several days to work together to develop innovative 
solutions to clearly-identified challenges. Small teams include 
participants from both the regulator and a diversity of entities to 
ensure the inclusion of regulatory, industry, and technology 
perspectives. The regulator assigns a specific regulatory compliance or 
market problem to each team and challenges the teams to solve or 
mitigate the problem using modern technologies and approaches. The 
teams then work for several days to produce actionable ideas, write 
computer code, and present their solutions. On the final day, each team 
presents to an independent panel of judges that selects winners. The 
most promising ideas can then be further developed either in 
collaboration with the regulator or by external parties. The FCA has 
organized seven Tech Sprints since 2016 and has started a pilot project 
on digital regulatory reporting built on ideas developed in a Tech 
Sprint.
    In the United States, Tech Sprints have been used in a variety of 
ways, including by the U.S. Census Bureau (Census Bureau) and the U.S. 
Department of Health and Human Services (HHS). At the Census Bureau, 
The Opportunity Project (TOP) matched tech companies, universities, 
government and communities together to translate U.S. government open 
data into useful digital products over the course of a 12-week sprint. 
At the end of the sprint, products launched and often moved on to full 
development as tools for the public. HHS, along with Presidential 
Innovation Fellows, organized health Tech Sprints known as TOP Health 
focused on healthcare-related challenges that used artificial 
intelligence (AI) and machine learning techniques with Federal data.

Call for Ideas

    The Bureau seeks ideas on how it can use Tech Sprints to advance 
regulatory innovation and compliance. Specifically, the Bureau is 
interested in using Tech Sprints:
     To leverage cloud solutions, machine automated compliance 
checks that allow for independent validation by regulators, and other 
developments that may reduce or modify the need for regulated entities 
to transfer data to the Bureau.
     To continue to innovate HMDA data submission, processing, 
and publication to help ease burden, increase flexibility, and resolve 
compliance challenges, while satisfying all legal requirements.
     To identify new technologies and approaches that can be 
used by the Bureau to provide more cost-effective oversight of 
supervised entities, effective evaluation of compliance and risk, and 
closer interface with financial industry systems and technology that 
may include the use, for example, of analytical tools in the review of 
mortgage origination data.
     To explore other technological approaches to robust and 
secure data access or exchange between regulated entities and the 
Bureau.
     To reduce unwarranted regulatory compliance burdens.
    The information provided will help the Bureau identify how 
stakeholders can work together to create a regulatory environment (1) 
which allows innovation to flourish, is flexible, efficient and 
effective; (2) where new and/or emerging risks can be identified and 
managed effectively; and (3) where consumers have the appropriate level 
of protection and suitable access to the benefits of technological 
advancement. The Bureau is seeking to collaborate with stakeholders in 
developing solutions to regulatory compliance challenges, and is not 
seeking to endorse a particular product or service.
    In particular, the Bureau asks commenters to respond to the 
following questions:
     What regulatory compliance issues, problems, procedures, 
or requirements could benefit from innovation through a Bureau Tech 
Sprint?
     What financial technology or other advances hold the most 
promise for helping modernize regulatory compliance?
     What other suggestions do you have for how the Bureau 
could plan, organize, and conduct a Tech Sprint, including its 
participants, duration, and location?
     Other than organizing Tech Sprints, what else might the 
Bureau do to encourage innovation in financial products and services? 
For example, could advances be encouraged by changes to certain Bureau 
rules or policies?
     Are there any concerns that might discourage participation 
in Tech Sprints that the Bureau could address?

    Authority: 12 U.S.C. 5511(c).

    Dated: September 12, 2019.
Kathleen L. Kraninger,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2019-20201 Filed 9-17-19; 8:45 am]
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