WASHINGTON, July 27, 2010 (GLOBE NEWSWIRE) — The top U.S. consumer watchdog plans to investigate the use of cryptocurrencies for temporary payments and step up oversight as big tech companies expand into the traditional financial sector, its director told Reuters.
The Consumer Financial Protection Bureau (CFPB) will publish “Buy Now, Pay Later” or BNPL products this fall and expects to propose regulations to increase competition in consumer finance early next year, Rohit Chopra said in an interview. .
“Is America ready for Big Tech to get into financial services? We’re starting to see how the industry is moving into payments. We’re starting to see how there’s interest in other areas,” Chopra said, referring to the companies’ branded loans and prepayments. cards. “This really raises a lot of questions about the future of financial services,” he said, particularly data privacy.
Cryptocurrencies have been undermining some crypto companies since the market took off in recent months.
Large online companies may increase the adoption of cryptocurrencies for real-time payments, which will be a “serious” focus for the agency, Chopra said, adding that the agency is concerned about the risks of hacking, errors and fraud.
“When Facebook proposed the Libra project, the regulators all had a wake-up call,” says Chopra. This can be a quick amount of money in Facebook’s networks.
The agency last year asked Facebook, Amazon.com ( AMZN.O ), Apple ( AAPL.O ) and Alphabet’s Google ( GOOGL.O ) and others to provide information on how they collect and use consumer payment data. he said.
Facebook eventually abandoned the Libra project due to regulatory objections.
A long-time consumer advocate, Chopra was tapped by US President Joe Biden to lead CFBB last year. Before that, he was a Democratic commissioner at the Federal Trade Commission, which focused on competition threats against Big Tech companies.
Big online companies are adopting BNPL’s financial products. In December, the CFPB sought information from BNPL companies to better understand their practices, and will publish its findings later this year, Chopra said. Read more
While BNPL offers alternatives to other loan products, Chopra said there is a lack of transparency because the loans are not included in customer credit reports, as mortgage and auto lenders have complained.
“To see some information about industry trends in this report, … you should expect to identify areas where there may be some risk to consumers.”
The agency has been developing “open banking” regulations that could increase Americans’ access to financial services. That was delayed by privacy concerns, Reuters reported. Read more
The agency is reviewing the rule’s implications for data protection and competition and expects to issue a draft later this year after receiving input from small businesses, Chopra said.
He is under pressure from progressives in the Democratic Party to reinvigorate the CFPB, which they say has retreated from enforcement and strong policymaking under former Republican President Donald Trump.
Corporate groups, however, have accused Chopra of being ideological, heavy-handed and unwilling to engage with the industry, criticisms he has dismissed.
“We’ve been in touch with hundreds of banks and credit unions, and we’ve given them a lot more guidance on how we expect to implement the current authorities,” he said.
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Reporting by Katanga Johnson and Michelle Price in Washington; Editing by Bill Berkrot
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