The Consumer Bankers Association (CBA) sent a letter to the Consumer Financial Protection Bureau (CFPB), advocating for the highest level consumer protections, particularly in the fintech lending market.
In a letter to Senate confirmed CFPB Director Rohit Chopra, CBA President and CEO Richard Hunt encourages Chopra to utilize the larger participant rule to mitigate the growing risk of consumer harm in the under-regulated fintech lending market.
“CBA urges the Bureau to add unsecured consumer loans to the larger participant rule so that the Bureau can supervise the key nonbanks in that market,” Hunt wrote. “Financial technology companies (fintechs) increasingly are providing financial products and services, but their activities are largely unsupervised by the Bureau, leaving customers vulnerable. Fintechs offering products similar to those offered by the nation’s leading retail banks must be held to similar standards to ensure consumers are protected.”
Hunt maintains fintechs should not be allowed to continue large scale actions in an unsupervised manner.
“It is time for the Bureau to further amend the rule to include markets increasingly led by (fintechs),” Hunt concluded. “The unsecured consumer lending market is ripe for inclusion in the larger participant rule because non-supervised fintechs offer financial products and services to consumers in numbers that rival some of the country’s largest supervised banks, but operate outside of the supervisory framework that allows the Bureau to monitor their activities and prevent consumer harm.”