The CFPB has launched a significant initiative seeking public feedback on enhancing privacy measures and safeguarding consumers from undue surveillance within digital payment platforms.
This move targets the expansive services offered through major technology companies and innovative payment formats like video gaming platforms and stablecoins. The initiative is in response to the potential privacy risks and errors in new digital payment methods that consumers are increasingly adopting for daily transactions.
Director of the CFPB, Rohit Chopra, emphasized the importance of ensuring that emerging digital payments are secure and free from harmful surveillance practices. “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,” he explained.
The agency has issued two notices for public comment. The first notice requests insights on how consumer payment data is collected, utilized, shared, and protected. This Request for Information stems from the CFPB’s ongoing research and observations that big tech companies often collect extensive consumer data beyond what is necessary for transactions. This data collection could lead to personalized pricing tactics, potentially exploiting consumer information for financial gains.
Furthermore, the CFPB is revisiting the adequacy of current federal data privacy laws like the Gramm-Leach-Bliley Act (GLBA) and the Fair Credit Reporting Act (FCRA), questioning if they effectively address today’s data surveillance challenges. A recent study by the Government Accountability Office pointed out that the consumer opt-out rate from data sharing is notably low, suggesting that many are unaware of how their financial data is used or the privacy risks involved.
The second notice pertains to a proposed interpretive rule on how the Electronic Fund Transfer Act should apply to emerging digital payment methods. This proposal aims to clarify the applicability of consumer rights under the act, ensuring robust protections against fraud and transaction errors in the digital age.
Public comments on the Request for Information and the proposed interpretive rule are due by April 11 and March 31, 2025, respectively. These steps mark a proactive approach by the CFPB to adapt longstanding consumer and privacy protections to modern payment technologies, ensuring that as financial transactions evolve, consumer rights are maintained.
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