The Consumer Financial Protection Bureau (CFPB) is exploring how it can utilize existing privacy and consumer protection laws to address emerging digital payment methods provided by major technology companies, as well as stablecoins and other cryptocurrencies.
The CFPB has issued a request for public feedback on enhancing protections for users of digital payment systems that operate outside of traditional banks and credit unions. It is specifically seeking comments on how firms that offer consumer financial products or services collect, utilize, share, and safeguard consumers’ personal financial data, including information gathered during payment processes.
Previous research conducted by the CFPB indicated that these payment systems often collect and utilize data that goes beyond what is necessary to execute a transaction. Such data can be combined with various other consumer information, including location, social media activity, and browsing history. The regulator cautions that this data could facilitate personalized pricing, which adjusts costs based on individual consumer factors.
Furthermore, the CFPB is proposing an interpretive rule regarding the Electronic Fund Transfer Act, which protects consumers against errors and fraud. This rule would address how this legislation applies to novel digital payment systems, especially those offered by large tech companies, gaming platforms, and less commonly used forms of digital currency.
CFPB Director Rohit Chopra emphasized the importance of consumer confidence, stating, “When people pay for their family expenses using new forms of digital payments, they must be confident that their transactions are not tainted by harmful surveillance or errors.”