Credit report

US Consumer Watchdog to Scrutinize Crypto Payments, Big Tech Moves to CFO

WASHINGTON, July 27 (Reuters) – The top U.S. consumer watchdog plans to examine the use of cryptocurrencies for real-time payments and step up scrutiny of Big Tech companies as they grow in the traditional financial sector, its director told Reuters.

The Consumer Financial Protection Bureau (CFPB) will also release a report on “buy now, pay later” or BNPL products this fall, and plans to propose a rule to boost consumer credit competition early in the year. next year, Rohit Chopra said in an interview. .

“Is America ready for Big Tech to enter financial services? We have already started to see how the industry is getting into payments. cards. “It raises a lot of questions about the future of financial services,” especially about data privacy, he said.

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Cryptocurrencies have come under intense scrutiny in recent months after the market crashed, toppling some crypto companies.

Large online businesses could drive widespread adoption of cryptocurrencies for real-time payments, which would be a “high” priority for the agency, Chopra said, adding that the agency is concerned about the risks of hacking, errors and fraud.

“Regulators all got a red flag when Facebook proposed its Libra project, which could potentially be a rapidly growing currency on Facebook’s networks,” Chopra said.

This prompted the agency last year to ask Facebook, Amazon.com (AMZN.O), Apple (AAPL.O) and Alphabet’s Google (GOOGL.O), among others, to provide information on how they collect and use consumer payment data, he said.

Facebook eventually scrapped its Libra project due to regulatory opposition.

A longtime consumer advocate, Chopra was chosen by US President Joe Biden to lead the CFPB last year. Before that, he was a Democratic commissioner at the Federal Trade Commission, where he targeted big tech companies on competition grounds.

Large online businesses are also driving the adoption of BNPL financing products. In December, the CFPB sought data from BNPL firms to better understand their practices and will release its findings later this year, Chopra said. Read more

While BNPL offers alternatives to other credit products, Chopra said there is a lack of transparency because loans are not usually included in consumer credit reports, which mortgage and auto lenders don’t. complained, he said.

“You should expect in this report to see a number of data on industry trends, identifying where … there may be risks for consumers,” he said.

The agency has also been working on an “open banking” rule that could increase Americans’ access to financial services. This was delayed by privacy concerns, Reuters reported. Read more

The agency is assessing the rule’s implications for data protection and competition, and plans to publish a draft after receiving feedback from small businesses later this year, Chopra said.

He is under pressure from Democratic Party progressives to reinvigorate the CFPB, which they say has backed down from tough policy enforcement and development under former Republican President Donald Trump.

Business groups, however, accused Chopra of being ideologically driven, overbearing and unwilling to engage with the industry, criticisms which he brushed off.

“We’ve met with hundreds of banks and credit unions, and really provided a lot more guidance on how we plan to exercise existing powers,” he said.

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Reporting by Katanga Johnson and Michelle Price in Washington; Editing by Bill Berkrot

Our standards: The Thomson Reuters Trust Principles.