Aneesh Chopra describes how the government is using public feedback and contests to modernize banking. The Consumer Financial Protection Bureau tackles confusing credit-card and mortgage practices, while the "Know Before You Owe" website lets people vote on new mortgage forms. Challenge.gov offers prizes to spur innovation in mobile payments and banking technology.
Chapters
So the question for those of you here is whether or not we can have a 21st century banking system that can fit the needs of where we are today. So I don't have an easy answer to the question, but I'll make one observation. One of the President's priority pieces of legislation was to create the Consumer Financial Protection Bureau because there were too many tricks and traps in our credit card system. Your bill statements would change in terms of what you owed. You didn't quite know what the reimbursement rates were and all the rest. Our mortgage system is kind of funky. You don't really know what your interest payments are going to be as you go through your— when you sign over your mortgage papers. There are a whole range of areas where we've had a lack of awareness and understanding and transparency. So in the spirit of a lean government startup, the agency won't even be officially born until July of 2011. Last week, they launched a cute little game. Called Know Before You Owe. The law says we've got to change these mortgage forms and make them more user-friendly. If you visit knowbeforeyouowe.gov, you can actually vote on different versions of what the new mortgage forms should look like. If you click on one versus the other, it asks you for feedback, what's working and what's not working in the other case. So we're trying to bring a little startup feel to how the agency does its job, all towards making sure that we have a banking system that works. Now, leaving aside the question of how we regulate the banks, there's a broader question about whether or not we can incorporate modern capabilities like mobile wallets, NFC communications, and the like. And one of the policy tools we have that I didn't speak of— and I talked about Challenge.gov— but the law allows the federal government to engage in prizes and competition policy so that now we can actually do some things to spur some innovation. In areas that we hadn't thought. If you visit the Treasury Department's open government page, www.treasury.gov/open, you can contribute your thoughts about what kind of challenges and prizes they might run to modernize the nation's banking system. I mean, who knows if the banking system in the future is run by your cell phone company? And that's one of the questions that is exciting, and I'd encourage you to participate.
