CFPB to Tech Companies: Submit Payment System Information

Final week, the CFPB issued a collection of orders to gather data on the enterprise practices of six massive know-how corporations working funds techniques.  The Bureau claims that the data will assist higher perceive how these companies use private funds knowledge and handle knowledge entry to customers so the Bureau can guarantee enough shopper safety.  The orders have been issued pursuant to Part 1022(c)(4) of the CFPA, which authorizes the CFPB to order individuals within the funds market to flip over data to assist the Bureau monitor for dangers to customers and to publish aggregated findings which are within the public curiosity.  The CFPB notes that the event of recent merchandise and enterprise fashions to meet shopper calls for for on-line commerce and digital funds through the pandemic “present new risks to consumers and to a fair, transparent, and competitive marketplace.”

The Bureau made obtainable an instance order that comprises 55 requests that may compel data on:

  • Information harvesting and monetization

  • Entry restrictions and consumer alternative

  • Information associated to cost platforms and compliance with federal shopper safety legal guidelines, such because the EFTA and the Gramm-Leach-Bliley Act

Placing It Into Observe:  The CFPB announcement, together with Director Chopra’s separate statement, clarifies that the CFPB might be maintaining a watchful eye on massive know-how corporations so as to defend customers. Right here, the CFPB’s jurisdiction over non-bank know-how companies that provide or facilitate funds performance and different monetary companies or merchandise supplies the Bureau’s hook for enforcement and supervision of such corporations. Whereas the CFPB has taken enforcement actions in opposition to smaller fintech corporations, these orders mirror the CFPB’s problem to massive know-how corporations and the potential shopper safety points raised by their operations. Lastly, the orders mirror the CFPB’s elevated scrutiny over fintech corporations based mostly on the speedy evolution of monetary marketplaces pushed by fintech and different non-banks performing increasingly features which have been traditionally left to banks.

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