Careful examination, regulation needed for big tech payments products
CUNA supports the Consumer Financial Protection Bureau’s (CFPB) inquiry into the tech companies’ payments practices and strongly encourages the bureau to carefully examine and regulate these entities moving forward, it wrote in response to the CFPB’s inquiry into big tech payment platforms.
“Consumers benefit from innovation that offers new delivery channels and products as well as innovations to traditional products,” the letter reads. “Credit unions want to ensure that financial products and services available from fintech companies or any company offer the same protections as those offered by regulated entities.”
“Our members do not want to discourage innovation, they merely want to ensure that innovation does not allow new entrants to make an end run around regulation,” it adds.
CUNA notes concern with:
- Tech companies and other non-banks purposely constructing products and services and using partnerships to skirt consumer protection laws.
- How tech uses and protects information collected from consumers and urges the CFPB to closely examine these companies’ data security and privacy practices.
CUNA also signed onto a joint comment letter with the American Bankers Association and Consumer Bankers Association noting the same concerns.
“Our members believe that regulators must move beyond monitoring nonbank payments markets and toward action that ensures nonbank payments do not develop into full-fledged shadow banking,” the letter reads.
“We urge CFPB to continue to increase its oversight until all consumers are protected at a consistent level, no matter the legal structure of the entity,” it adds.
The joint letter also outlines the financial services industry’s payments agenda:
- Strong consumer protection.
- Fair and consistent rules.
- Funds that are safe and secure.
- Transactions paid through fair pricing rather than by the selling of consumer data.