Senate Committee on Banking, Housing, and Urban Affairs Chairman Sherrod Brown (D-OH) is encouraging the Consumer Financial Protection Bureau (CFPB) to examine consumer fintech risks.
Brown has forwarded correspondence to CFPB Acting Director Dave Uejio in the wake of the recent actions of Chime, a nonbank fintech.
In the correspondence, Brown cited news reports alleging Chime closed or froze several accounts because of potentially fraudulent activity. Chime acted without any prior customer warning to its customers, with some account closures resulting from fraudulent federal stimulus checks and unemployment insurance deposits suspicions.
“Chime’s abrupt, involuntary closures of its customers’ accounts—and locking them out of access to their funds—can cause lasting damage to their financial condition,” Brown wrote. “Chime customers who could not access funds may have been unable to pay their bills, subject to late fees, become delinquent on bills and put at risk of losing their homes to eviction or foreclosure.”
Brown indicated the CFPB’s mission is to protect consumers from risk in the marketplace for consumer financial products and services.
“This includes the risks associated with receiving financial services from nonbanks,” Brown concluded. So that I may better assess these issues, I ask that the Bureau share insight into the risks posed by nonbanks to consumers as well as the measures the Bureau is taking to address the risks by nonbank fintech companies and their affiliated banks. In addition, please offer any guidance on any gaps in the regulatory framework that may require Congressional action.”