The Clearing House Real-Time Payments Tracker October 2023

CFPB Director Calls for Stronger Data Protections

Consumer Financial Protection Bureau

Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), has reportedly expressed concerns about the potential risks posed by payment systems that enable excessive surveillance and financial censorship. 

In a Friday (Oct. 6) speech at the Brookings Institution, Chopra emphasized the need for stronger protections against the misuse of personal data and highlighted the importance of maintaining consumer control over their banking information, Reuters reported Friday.

Chopra’s remarks come as the CFPB considers regulatory moves to safeguard the public from the kind of surveillance prevalent in China, according to the report. He raised concerns that the United States may be heading towards a consolidated market structure similar to China’s, where the lines between payments and commerce are blurred, creating incentives for excessive surveillance and even financial censorship.

To address these concerns, the CFPB is considering ordering large U.S. tech firms to disclose information about their use of personal data and private currencies, the report said. This move aims to shed light on how these companies handle consumer financial information and ensure that appropriate safeguards are in place.

The CFPB also plans to release a regulatory proposal later this month, focusing on consumers’ control over their banking data, per the report. This open banking proposal aims to empower consumers to switch service providers more easily and exert greater control over how financial technology companies collect and use their data. 

Chopra stressed the critical importance of protecting American consumers from excessive surveillance and the misuse of their data, according to the report. He emphasized the need for stronger safeguards and regulatory oversight to prevent potential abuses by non-bank financial institutions that offer consumer payment platforms, especially when these services are provided to large financial institutions.

These remarks suggest that despite recent challenges in Washington, including the threat of a partial government shutdown and Supreme Court deliberations that could impact the CFPB’s existence, the agency remains committed to advancing its regulatory agenda, the report said.

Chopra said Aug. 15 that the CFPB wants to crack down on “data brokers” who collect and sell people’s personal information. He said the agency is considering a rule that would define data brokers who sell certain types of consumer data as a “consumer reporting agency,” which would give consumers more protection under the law.