Through a series of recent public comments, top leadership from the Consumer Financial Protection Board (“CFPB”) is warning that the agency is poised to play an increasingly affirmative role in the oversight of new payments systems, including the technologies and technology companies involved. First, CFPB Director Rohit Chopra told federal lawmakers that “the desire of Big Tech to gain greater control over the flow of money in the economy raises a number of questions.” Director Chopra’s comments make clear that his agency is stepping up its regulatory scrutiny of large technology firms as well as more traditional participants in the consumer finance industry, such as banks and mortgage companies. Just days later, Director Chopra issued a statement reiterating his concerns about the role of large technology companies in consumer finance and further declaring that the CFPB is “actively monitoring” and preparing for a broader consumer adoption of cryptocurrencies. Commenting specifically on the Report on Stablecoins issued by the President’s Working Group on Financial Markets, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, Director Chopra stated that the use cases for stablecoins in retail payments, consumer deposits, stored value instruments, and others “trigger obligations under federal consumer financial protection laws,” including the prohibition of unfair, deceptive, or abusive acts or practices. These comments and others by the CFPB lead many to conclude that a more aggressive enforcement approach across industries is likely to follow.
As a starting point, Director Chopra indicated that the CFPB is examining the following questions regarding tech firms’ role in real-time consumer payments:
- How will these firms harvest and monetize data they collect on consumer transactions?
- What criteria will the firms use to decide who is removed from the platform?
- How will they ensure that payment systems adhere to consumer protections?
- Will Big Tech giants have an incentive to impede the entry of new firms seeking to offer competitive products and services?