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CBA Statement On New CFPB Orders Examining Consumer Data Practices At Leading Technology Firms
October 21, 2021
Consumer Bankers Association (CBA) President and CEO Richard Hunt today released the following statement after the Consumer Financial Protection Bureau (CFPB) issued a series of orders to collect information on the business practices of large technology companies operating payments systems in the United States. The initial orders were sent to Amazon, Apple, Facebook, Google, PayPal, and Square.
“CBA applauds Director Chopra and the CFPB for advancing the Bureau’s mission of protecting consumers in the rapidly evolving financial marketplace. Since the Bureau was founded, a growing share of banking activity has occurred outside of the purview of leading regulators, putting consumers and the resiliency of the financial system at risk. CBA long has advocated for instituting a level playing field to ensure every American family receives the protections they deserve, regardless of where they go to meet their financial needs. We stand ready and willing to assist the CFPB and other prudential regulators in this effort.”
To read the CFPB’s official release, click HERE.
To read a statement from Director Chopra regarding today’s announcement, click HERE.
Since the Bureau’s founding more than a decade ago, the financial marketplace has rapidly evolved with the emergence of technology companies increasingly offering products and services traditionally handled by banks. While they directly compete for the same customers, these firms do not abide by the same stringent federal oversight requirements as America’s leading banks, posing a significant and growing threat of consumer harm.
In August, The Bank for International Settlements released a report warning of the substantial risk to the global financial system posed by the lack of sufficient regulation and supervision among leading technology firms. You can read their findings HERE.
Recognizing the growing risks associated with this disparate regulatory framework, CBA has encouraged policymakers to modernize the rules of the road to reflect the modern banking landscape today. In a letter sent earlier this month to Director Chopra, Hunt specifically urged the Bureau to mitigate the potential for consumer harm in the under-regulated fintech lending market by issuing a larger participant rule. You can read the full letter HERE.
Additionally, in an October op-ed in American Banker, Hunt stated why the regulatory disparity in the consumer lending market should alarm policymakers whose broad oversight reforms following the 2008 financial crisis were conceived before the word “fintech” was ever in their lexicon. You can read the full op-ed HERE.