CFPB creates new unit to promote fairness in the financial services sector

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The Consumer Financial Protection Bureau (CFPB) is setting up a new office to help it carry out its mandate to promote fair, transparent and competitive financial services markets.

The Office of Competition and Innovation, as the new unit is called in the CFPB announcement, will be responsible for helping to drive innovation in the financial services industry in the United States. It will do this by simultaneously fostering competition and identifying barriers that new market entrants face to overcome.

The new unit replaces the Office of Innovation, which focused on an application-based process to confer special regulatory treatment on individual companies. The CFPB says this approach to the market has been very inefficient and has raised new challenges, hence the need for the pivot.

“After a review of these programs, the agency concludes that the initiatives have been found to be ineffective and that some companies participating in these programs have made public statements indicating that the Bureau has provided them with benefits that the Bureau expressly did not provide. “, indicates the press release of the CFPB. said.

The rules that the new unit will establish will apply to “all companies in the market”. The statement further noted that the CFPB is open to suggestions from companies, startups and members of the public in the rulemaking process.

CFPB could look into digital currency companies

The CFPB does not explicitly mention digital currencies and has not been involved in the market. However, this move, along with other recent CFPB activities, could set the stage for the body to play a bigger role in the digital currency market.

Last month, the CFPB issued a notice saying it was invoking the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. .

“Non-banks do not have bank, savings or credit union charters; today many operate nationally and market themselves as ‘fintechs’,” he said.

Significantly, the move follows a call from U.S. Senator Elizabeth Warren for the body to crack down on digital currency abuse. Warren told Bloomberg that the infiltration of digital currency into the market also crosses CFPB jurisdictions.

Meanwhile, other market regulators focused on consumer protection, including the SEC and CFTC, have also focused on the digital currency market.

The case is also similar outside the United States. The UK’s Financial Conduct Authority (FCA) recently warned consumers about the risks of investing in digital currencies.

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