President Biden today issued a wide-ranging executive order on competition issues across the U.S. economy. Among provisions related to the financial services industry, the order calls on the Consumer Financial Protection Bureau to complete its implementation of Section 1033 of the Dodd-Frank Act and to enforce the prohibition on unfair, deceptive or abusive acts and practices consistently with Section 1031 of Dodd-Frank. The order also calls for the Justice Department and federal banking regulators to review current policies on bank mergers and for the Treasury Department to report on the effects of large tech companies’ and other nonbanks’ entry into financial services.
The CFPB last fall issued an advance notice of proposed rulemaking on Section 1033, which addresses consumers’ rights to access and control information about their accounts. “ABA and our members fully support customers’ ability to access and share their financial data in a secure, transparent manner that gives them control,” said American Bankers Association President and CEO Rob Nichols. “We have been working with the CFPB since 2017 on how to ensure consumers remain protected when they share their financial data outside of the secure banking ecosystem. The bureau’s early decision to establish guiding principles has allowed banks and technology companies to collaborate on tools that are already facilitating access to financial data in a way that protects and empowers consumers.”
As regulators and the Justice Department “revitalize” M&A oversight pursuant to the order, Nichols added that ABA “will continue to call for updating merger review guidelines to finally consider nonbank competitors, such as fintechs and credit unions, that account for a growing share of the financial services marketplace, yet don’t have to meet bank requirements for compliance and community investment, and in some cases don’t even have to pay federal taxes.”
Nichols added that “if the administration wants to see competition in action, the nation’s banking sector is a good place to start. The U.S. has the deepest and most diverse banking system in the world, with nearly 5,000 banks of all sizes, charters and business models who compete for business every day. The depth and resilience of today’s banking industry was on full display during the pandemic, as banks of all sizes provided unprecedented support to their customers, communities, and the broader economy, while also meeting their rigorous regulatory obligations.”