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The Consumer Financial Protection Bureau (CFPB) is exploring how existing privacy and consumer protection laws can be applied to emerging digital payment platforms, including those offered by Big Tech, stablecoins, and other cryptocurrencies.
As part of its efforts, the CFPB has issued a public request for input on ways to enhance protections for consumers using digital payments that bypass traditional banks and credit unions. The regulator is particularly interested in understanding how companies collect, use, share, and safeguard personal financial data derived from these payment mechanisms.
Past research by the CFPB has revealed that digital payment platforms often collect and utilize data far beyond what is necessary to complete transactions. This data can be cross-referenced with other information about consumers, such as their location, social media activity, and browsing habits.
The agency warns that such extensive data collection could enable payment companies to implement personalized pricing models, where prices are tailored based on individual consumer profiles.
To address these concerns, the CFPB also proposes an interpretive rule to clarify how the Electronic Fund Transfer Act, which offers protection against errors and fraud, applies to innovative digital payment methods. This includes platforms operated by large tech companies, video gaming platforms, stablecoins, and other emerging digital currencies not yet widely used for consumer transactions.
“When people pay for their family expenses using new forms of digital payments, they must be confident that their transactions are not tainted by harmful surveillance or errors,” said CFPB Director Rohit Chopra.
The move signals the agency’s commitment to ensuring fairness and transparency in the rapidly evolving digital payments landscape.
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