Government regulation and its expansiveness has been a hot-button issue almost since the inception of the Obama White House Administration took the helm, and this latest development will no doubt become a lightning rod. The Consumer Financial Protection Bureau, an inaugural agency headed by Elizabeth Warren and positioned to further protect consumers from fraudulent activity from the finance industry, is not only poised to be a new regulator with teeth but is preparing to utilize technology in an unprecedented manner by a government institution. Crowdsourcing, big data and mobile technology will be just a few of the tools employed to detect and address consumer fraud before it causes the next great financial crisis.
“We have the opportunity to create a brand new consumer agency from the ground up. This agency will put a cop on the beat to enforce the laws on credit cards, mortgages, student loans, prepaid cards, and other kinds of consumer financial products and services,” said Warren, who is also an assistant to President Obama and a special advisor to the Secretary of the Treasury on the CFPB, in a statement. “We want to make sure that the American people are with us all the way while we build it.”
The core of the digital engagement will be the Bureau’s site at ConsumerFinance.gov but various social elements will also be in play including Facebook, Flickr, Twitter and YouTube. These social media platforms look clearly aligned with the agency’s mission to engage citizens and gather feedback. In addition, the new consumer protection agency plans to use crowdsourcing to detect issues in the market earlier.
According to Alan W. Silberberg, Founder Gov20LA and Partner with Constellation Research Group, “The creation of the CFPB’s crowd-sourced fraud reporting system is a wonderful leap forward for the transparency and Gov 2.0 movements. Other regulatory agencies should be paying heed, and following with their own type of crowd-sourced fraud reporting.” He continues, “That being said, there needs to be some controls put in place to ensure that people can’t just make claims of fraud without basis to harm someone’s or a business’ reputation online. The Gov 2.0 movement is just beginning to bring to the marketplace this type of consumer facing Web site from a Government agency and clearly the CFPB’s leadership on this issue will be recognized.”
Given that African-Americans were particularly adversely affected during the mortgage fraud this development should prove an interesting tool for the diverse demographic in the United States.
Look for elements of the CFPB to go into action July 21, 2011.
Follow Lauren on Twitter @mediaempress