Ron Lanton 4/28/22 Ron Lanton 4/28/22

CFPB Will Invoke Dormant Authority to Scrutinize Nonbank Companies

The Consumer Financial Protection Bureau (CFPB) issued an announcement that it is “invoking a largely unused legal provision to examine nonbank financial companies that pose risks to consumers. The CFPB believes that utilizing this dormant authority will help protect consumers and level the playing field between banks and nonbanks. The CFPB is also seeking public comments on a procedural rule to make this process more transparent.”

Additionally, “Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the CFPB has authority to use traditional law enforcement to stop companies from engaging in conduct that pose risk to consumers; this can involve adversarial litigation. However, the law also gives the CFPB authority to conduct supervisory examinations to review the books and records of regulated entities. CFPB examiners typically provide a report to entities with problems that need to be addressed, and responsible institutions typically take prompt corrective action.”

Fintech has been an area that has been ahead of regulatory changes, but as we have been forecasting to industry stakeholders this may be about to change. It is imperative that you have a strategic plan going forward.

Lanton Law is a national boutique regulatory law and lobbying firm that focuses on technology and healthcare/life science. If you are an industry stakeholder with questions about the current landscape or if you would like to discuss how your organization’s strategic initiatives might be impacted by either Congress, regulatory agencies or legal decisions, contact us today.

Ron Lanton 10/28/21 Ron Lanton 10/28/21

Rohit Chopra of the Consumer Financial Protection Bureau testified before the House Financial Services Committee on Changing Tech Stakeholder Influence

Rohit Chopra who is the Director of the Consumer Financial Protection Bureau testified before the House Financial Services Committee regarding how “Congress has tasked the CFPB with monitoring market conditions to spot risks, ensure compliance with existing law, and promote competition in order to protect families and honest businesses.”

He outlined the Bureau’s concerns with today’s tech and fintech market influences.

“Technological progress holds the potential for enormous benefits to households and the economy, particularly with respect to real-time consumer payments. At the same time, the desire of Big Tech to gain greater control over the flow of money in the economy raises a number of questions. For example, how will these firms harvest 2 and monetize data they collect on our transactions? What criteria will they 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? With this in mind, the CFPB has issued orders to dominant firms such as Facebook, Google, Apple, Amazon, Square, and PayPal to shed light on some of these questions. We will also be studying some of the practices of Chinese tech giants, including services provided by WeChat Pay and AliPay. These efforts complement other work within the Federal Reserve System to ensure families and businesses can rely on a fast and reliable payments system. It will also inform other initiatives to ensure that our evolving payments landscape is in alignment with our national interest. Given the state of today’s economic conditions, the Bureau also intends to ramp up its monitoring of other markets and their impact on specific population segments.”

Mr. Chopra’s testimony can be viewed here. Throughout the year we have seen where the fintech and technology stakeholder interests have begun to merge due to a changing marketplace.