Consumer watchdog in the United States to examine Big Tech data and promote lending competition

Consumer Watchdog

Consumer finance watchdog chief Rohit Chopra told lawmakers on Wednesday that his agency will investigate the impact of Big Tech on the flow of money in the economy. Citing the use of real-time consumer payments systems that collect massive amounts of personal data.

According to CFPB director Chopra, Big Tech’s entry into the payments sector raises a number of issues. Some of it includes: 

  • “We’re concerned about how these companies intend to use the information gleaned from our transactions. 
  • What criteria are used to determine who is ejected from the show? 
  • When it comes to payment systems, how will they ensure that consumer protections are met?”

He stated, among other things, that the agency’s goal is to reduce the number of foreclosed homes in the United States and to increase consumer lending competition.

Furthermore, it intends to increase enforcement against companies that repeatedly violate consumer finance laws.

Chopra, a long-time consumer advocate, was appointed to lead the Consumer Financial Protection Bureau by Democratic President Joe Biden (CFPB). The House Financial Services Committee will hold a hearing on Wednesday, followed by the Senate Banking Committee on Thursday, both in Washington, D.C.

Consumer watchdog in the United States to examine Big Tech data
Consumer watchdog in the United States to examine Big Tech data

Many small businesses are still struggling to pay their rents

“Many families are still unable to meet their monthly obligations, such as mortgages and rent. Many small businesses are struggling to stay financially afloat.” Chopra revealed this to the panel on Wednesday.

Following Chopra’s testimony, the CFPB will become a political flashpoint once more. Republicans have sought to shackle the agency since its inception, branding it unaccountable and intrusive.

Chopra was well-known at the Federal Trade Commission for his zealous defence of the rights of middle-class Americans. He also collaborated with Senator Elizabeth Warren to help launch the Consumer Financial Protection Bureau (CFPB) in 2010.

“This hearing should serve as a reminder of both the Bureau’s broad authority and Director Chopra’s ability to effectively use the Bureau’s toolbox,” said Isaac Boltansky, policy research director at financial firm BTIG.

“OPEN BANKING” 

“Open banking” is a Democratic policy priority that would require financial institutions to give customers greater control over their personal financial data.

Analysts believe the Consumer Financial Protection Bureau (CFPB) will implement an open-banking rule proposed by the agency during the Trump administration.

Chopra stated on Wednesday that similar regulations exist in other countries and that he is eager to review the CFPB’s response to its proposal.

‘At the same time, we’ll need to ensure that privacy and security are protected,’ he added.

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