The grills are hot.
The 4th of July fireworks are ready to hiss in the night sky.
For Big Tech, a long hot summer may give way to…
… well, maybe not so much relief.
At least not on Capitol Hill.
And certainly not when it comes to the payment ambitions of some big names in technology and commerce.
To this end, the Unified Agenda of Federal Regulatory and Deregulatory Actions, as published by the Office of Information and Regulatory Affairs explains what will be considered from June this year to June 2024. That’s certainly a long time frame, but it’s a roadmap of what we’ll see from the likes of the Consumer Financial Protection Bureau (CFPB).
The agenda, as mentioned above and as prepared by the CFPB, includes the “Oversight of Larger Participants in Consumer Payment Markets”. The CFPB has argued that Section 1024 of the Dodd-Frank Wall Street Reform and Consumer Protection Act allows the agency to monitor non-banks for compliance with federal consumer finance laws — and that supervision can extend to the “larger participants when it comes to consumer payments.
The agenda of the CFPB in the coming months, updated late last month, signals an ambitious scope, building on, and in some cases expanding on, the semi-annual update released late last year. The agenda includes a “pre-rule” phase on overdrafts.
The “pre-rule” phase has been defined by the agency as an “optional early step” in the regulatory process…while it should be noted that oversight of the rules of larger participants is still in the “proposed” phase. The “register of supervised non-banks” included entities in the “final regulatory phase”.
In some cases, final rules may be issued with no comment period, so it’s possible we’ll get some movement here. The registry proposal, which would document companies that had/have broken the law, is stretching back to the end of last year.
Fireworks in July?
The regulatory (proposed) rule on the larger participants could come as early as this month, according to the timetable that is offered.
And it would follow the Action of October 2021 by the CFPB, ordering information about business practices of Big Tech companies operating payment systems in the US
“The information will help the CFPB better understand how these companies use personal payment information and manage access to data for users so that the Bureau can ensure adequate consumer protection,” the CFPB said at the time. The first orders were sent to Amazon, Apple, Facebook, Google, PayPal and Square. The agency also noted that it would investigate Alipay and WeChat Pay.
The orders focused, among other things, on data collection and monetization, user choice, and whether these companies may be acting in an anti-competitive manner.
In April, CFPB Director Rohit Chopra Yahoo Finance noted that there are concerns around stablecoins, around the collection and use of data, and of course the security around it.
Stablecoins, Chopra said, could potentially start “riding the rails of a Big Tech platform or card network.”
Elsewhere, he said of the platforms: “There are some questions we have… about how some of these services decide to kick a trader or kick a user? How do they actually use all the data they collect from our phones and through what we buy?”
Open banking, of course, looms large among all of these players, and financial services as a whole (and the CFPB has indicated a timeframe of “a few months” for comment on a formal open banking proposal, due to be finalized next year).
The 4th of July is a holiday, and the banks and Congress and the agencies that populate Capitol Hill are quiet for a while. And then the proposals, the rules, the comments fly fast and furious.