Ladies and Gentlemen:
The Bank Policy Institute[1] appreciates the opportunity to comment on the Notice and Request for Comment Regarding the Inquiry Into Big Tech Payment Platforms (“Notice”)[2] issued by the Consumer Financial Protection Bureau (“CFPB” or “Bureau”). BPI supports innovation and welcomes competition in payments and other activities in which banks engage when this innovation is conducted responsibly and in a way that ensures that customers are protected through consistent regulation and oversight. However, both customers and the U.S. financial system are put at risk when Big Techs and fintechs[3] offer banking products and services without adhering to all the consumer regulatory protections banking organizations are required to follow and with far more limited – if any – onsite supervision to determine compliance with those regulations.
In recent years, tech companies have unbundled traditional banking services, such as deposit- taking, payments, and lending activities, and offered one or more of these products, or access to these products, to consumers outside of the ordinary federal bank regulatory perimeter. Tech companies have been able to grow at exponential rates, attracting millions of customers while simultaneously avoiding both the robust regulatory, supervisory, and examination regime that applies to ordinary banks and the longstanding U.S. prohibition on mixing banking and commerce. In short, these tech companies are able to provide products and services that may be perceived by customers as equivalent to those provided by banks, while avoiding the framework put in place by Congress and federal banking regulators to ensure that consumers are protected and the overall financial system remains safe, sound and stable.
In light of the risks to consumers presented by tech companies’ offering payments services outside of the federal bank regulatory regime, the CFPB should ensure that consumers and their personal financial data are protected when using those companies’ payments services. In addition, the CFPB should coordinate with other regulators and policymakers to ensure that tech companies and other nonbank providers are subject to a regulatory, supervisory, and examination framework designed to protect consumers and the safety and soundness of the financial system.
To read the full comment letter, please click here.
[1] The Bank Policy Institute is a nonpartisan public policy, research, and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.
[2] Notice and Request for Comment Regarding the CFPB’s Inquiry Into Big Tech Payment Platforms, 86 Fed. Reg. 61182 (November 5, 2021).
[3] Hereinafter, the term “tech companies” is used to refer to Big Tech and fintech companies.
