The CFPB is moving fast on a Fintech sandbox that would remove the regulatory burden from new firms. The sandbox effort will foster innovation and allow the CFPB to learn more about firms that had previously been on the regulatory fringes.

However, others argue that the CFPB will run the risk of giving Fintech firms an unnecessary giveaway by not imposing consumer protection rules during testing periods. Tim Chen, CEO of NerdWallet, says, "What startups should be doing is building a better mousetrap to help consumers that doesn't break the law rather than trying to arbitrage the gap between the law and what the big banks feel comfortable doing and what [a Fintech firm] can do because they're tiny and no one will come after them."

Scott Pearson, an attorney at Ballard Spahr, counters claims like Chen's saying, "What the CFPB is doing is allowing Fintechs to test their products in a controlled environment where regulators are looking at what they're doing and can give advice along the way."

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