The Credit Union National Association (CUNA) has expressed support for the Consumer Financial Protection Bureau’s (CFPB) inquiry into technology companies’ payments practices.
In a Dec. 20 letter to leadership at the CFPB, CUNA strongly encourages the bureau to examine and regulate those entities moving forward. Specifically, CUNA voiced concerns about the potential of technology companies and other non-banks to purposely construct products and services to skirt consumer protection laws. Further, it cited concerns about how some of the technology companies use and protect information collected from consumers.
“Consumers benefit from innovation that offers new delivery channels and products as well as innovations to traditional products. Credit unions want to ensure that financial products and services available from fintech companies or any company offer the same protections as those offered by regulated entities,” the letter states. “Our members do not want to discourage innovation, they merely want to ensure that innovation does not allow new entrants to make an end run around regulation.”
The letter was sent in response to a CFPB order that Google, Apple, Facebook, Amazon, Square, and PayPal submit information about their payments, products, plans, and practices.
Currently, there are regulatory gaps that fintech and other companies exploit to provide financial services. This leads to less consumer protection and, at its worst, leads to the exploitation of consumers as their expectation of consumer protection is based on the regulation of financial institutions and the products and services they offer. Consumer protection can be vastly different when a product or service is offered by non-financial institutions, and consumers do not always appreciate this difference,” the letter continues.