Manatt Financial Services Partner Bryan Schneider spoke with PYMNTS.com on what areas the Consumer Financial Protection Bureau (CFPB) is eyeing as it increases enforcement efforts, where crypto regulation is headed, and the art of regulating to protect consumers while fostering innovation.
Schneider explained that we are already seeing a windup of action, of lawsuits and allegations of consumer harm, as well as claims that some financial innovations fall within CFPB’s jurisdiction. He added that with this in mind, all digital financial services (no matter the vertical) upstarts need to consider how they fit into this new world where everything is viewed a little suspiciously. Schneider notated "that suspicion, a desire to get under the hood and see what’s not been working for large swathes of the population, will envelop credit reporting processes. Any aspect of [credit reporting] that touches on protected classes or an economically disadvantaged group of people is going to be seen with a particularly strong lens.”
When asked by PYMNT.com if the CFPB’s aggression might chill innovation, Schneider responded, “I think that sometimes that is the hardest thing for any regulator to do, because you see harm in front of you — well, you want to prevent that you want to remediate it.”
Schneider also noted that companies whose services are being driven by AI and machine learning technologies should be concerned and vigilant in their interactions with the CFPB. He continued, saying "I wouldn't back down, because this is the way of the future. It's not about fear — it's about vigilance and preparation."
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