CFPB Eyes Tech Giants for Stringent Financial Oversight

In a bold initiative to enhance consumer protection in the digital economy, the U.S. consumer finance agency has put forward a plan to regulate the burgeoning digital payment sector. This move targets tech behemoths and their e-wallet services, aiming to bring them under similar scrutiny as banks. The Consumer Financial Protection Bureau (CFPB) is set to oversee these platforms to ensure they adhere to privacy and anti-deception laws.

The proposed regulation could impact an estimated 17 entities that manage a colossal 13 billion transactions each year. Despite the CFPB's discretion on the full list, names like ApplePay, CashApp, GooglePay and PayPal are in the spotlight. Their response to these proposed changes has been muted, with Google withholding comments and others yet to make a statement.

CFPB Director Rohit Chopra is spearheading this push, continuing his critical stance on Big Tech's handling of consumer privacy and competitive practices. Since taking the helm in 2021, Chopra has been honing in on how these giants use customer data and their payment mechanisms.

Chopra's recent comments shed light on concerns about excessive data harvesting by tech companies, likening it to surveillance practices. With the new rule, the agency aims to eliminate loopholes that currently allow tech companies to operate with less regulation than traditional banks, leveling the playing field across the financial ecosystem.

Banking associations have welcomed the proposal, underscoring the necessity for equitable consumer safeguards regardless of the financial service provider. The plan is now open for public feedback until early 2024, offering a platform for discourse on the future of financial oversight in the tech age.

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