In a letter to the CFPB today, the American Bankers Association and the Consumer Bankers Association emphasized the need for consistent consumer protection and a level playing field for payments products offered by banks and big tech firms. As CFPB conducts an inquiry into payment platforms offered by companies like Facebook and PayPal, ABA and CBA called on the CFPB to carefully consider three core issues. These include: the extent to which consumers have control over their data, how consumers are being protected from loss of value or fraud and the preservation of competition and consumer choice.
“Big tech is increasingly making inroads into finance and financial services, including payments,” the groups wrote. “However, despite the level of growth and engagement these companies have into the financial services market, they are not supervised and regulated like banks offering these same services. As the consolidation of large companies in the payments market continues, including consolidation of financial technology companies, these risks will only become more pronounced. New ideas and innovation are vital to a healthy and robust marketplace, but should not subvert safeguards that protect consumers.”
The associations emphasized that “consumers are best protected when entities offering similar financial products and services are subject to the same oversight. Innovation and competition are integral to the marketplace, but must be undertaken responsibly and subject to appropriate safeguards that protect consumers.”