Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), expressed concern about the potential risks associated with the fact that payment systems apply, in his opinion, excessive financial censorship, and exceed reasonable surveillance limits.
During a speech at the Brookings Institution at the end of last week, Mr. Chopra drew attention to the need to strengthen measures to protect against the practice of misuse of personal information. He also stated the need for consumers to maintain control over their banking data.
The media note that Rohit Chopra made his statements at a time when the CFPB is exploring the possibility of introducing regulatory measures aimed at ensuring a high level of protection of citizens from surveillance of such a scale and nature, which is a common practice in China. He also stressed that, with a high degree of probability, the current trends observed in the United States are what can be designated as a path to the creation of a consolidated market structure similar to the Chinese one. In the mentioned Asian country, the boundaries between payments and commerce were not clearly defined, as a result of which there were some kind of motives for surveillance exceeding the justified limits of monitoring, and financial censorship.
As part of the search for a solution to the problem of excessive control, the CFPB is considering the possibility of imposing an obligation on large technology companies in the United States to disclose information about the use of personal data and private currencies. This decision, which is currently being discussed as one of the possible actions, is intended to ensure transparency of the way firms work with the financial data of clients. Also, as part of this potential step towards curbing excessive regulation, the right to confidentiality is guaranteed.
The media reports that the CFPB plans to publish a regulatory proposal on these issues by the end of the current month. In this case, the agency plans to focus on solving the problem of consumers’ control over their banking information. The proposal for open banking services is designed to ensure that citizens have a more affordable and easy-to-implement opportunity to change financial service providers. Also, in this case, a higher level of consumer control is provided over how firms operating in the financial technology sector collect and use confidential data.
Rohit Chopra described as a critical need to protect American citizens from excessive surveillance. In this context, he mentioned the importance of ensuring exclusively legitimate scenarios for the use of personal data and preventing violations of the relevant norm.
Mr. Chopra stated the need to strengthen safeguards and regulatory oversight to prevent abuse by financial institutions that do not have the status of banks and that offer platforms for making payment transactions.
Experts note that the statements of the head of the CFPB against the background of problems in Washington, including the threat of a partial government shutdown and discussions in the Supreme Court that could affect the existence of the agency, should be interpreted as a declaration of commitment promoting the regulatory program.
In August, Rohit Chopra said that the CFPB wants to prevent the activities of so-called data brokers who collect and sell the personal information of citizens. According to him, the agency is working on the creation and implementation of a rule that forms a kind of classification of the mentioned brokers in accordance with the types of data they work with.
As we have reported earlier, CFPB and European Commission Start Discussion About Digitization of Finance.