CFPB to technology companies: submit payment system information – Consumer protection

United States: CFPB to technology companies: submit payment system information

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Last week, the CFPB issued a series of orders to collect information on the business practices of six major tech companies operating payment systems. The Bureau claims the information will help better understand how these businesses use personal payment data and manage access to user data so that the Bureau can provide adequate consumer protection. The orders were issued under Section 1022 (c) (4) of the CFPA, which authorizes the CFPB to order payments market participants to turn over information to help the Bureau monitor risks to consumers and to publish aggregate findings that are in the public interest. The CFPB notes that the development of new products and business models to meet consumer demands for online commerce and electronic payments during the pandemic “presents new risks for consumers and for a fair, transparent and competitive market”.

The Bureau provided an example order which contains 55 requests that will require information on:

  • Data collection and monetization
  • Access restrictions and user choice
  • Information on payment platforms and compliance with federal consumer protection laws, such as EFTA and the Gramm-Leach-Bliley Act

Put into practice : CFPB announcement, including separate statement from Director Chopra declaration, specifies that the CFPB will keep a vigilant eye on large technology companies in order to protect consumers. Here, the CFPB’s jurisdiction over non-bank technology companies that offer or facilitate payment functionalities and other financial services or products forms the Bureau’s hook for the enforcement and oversight of these companies. Although the CFPB has taken enforcement action against small FinTech companies, these orders reflect the CFPB’s challenge to large tech companies and the potential consumer protection issues raised by their operations. Finally, the ordinances reflect the CFPB’s increased control over FinTech companies based on the rapidly changing financial markets driven by fintechs and other non-banks increasingly performing functions that have historically been left behind. to banks.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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