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Fintech Regulation as a Key to Consumer Autonomy
How rules and compliance can liberate consumers and yield profit in finance
However, it is worth noting that not ALL fintech is bad and that fintech innovations have been helpful to consumers - whether it is by providing access to credit or by enhancing convenience at the point of purchase.
Jason Mikula of Fintech Business Weekly reports on his experience at the international Money20/20 conference. I took particular note of this highlight from CFPB Director Rohit Chopra’s remarks:
“Around the world and here at home, financial services are slowly moving toward open banking and open finance. A more decentralized and neutral consumer financial market structure has the potential to reshape how companies compete in the sphere.
This week, the CFPB will launch the process to activate a dormant authority under Section 1033 of the Consumer Financial Protection Act that I expect will accelerate this shift.
The provisions provide for personal financial data rights for Americans, but would only have teeth after the CFPB defined the specifics through rules.
While not explicitly an open banking or open finance rule, the rule will move us closer to it, by obligating financial institutions to share consumer data upon consumer request, empowering people to break up with banks that provide bad service, and unleashing more market competition.”
The bottom line here: New regulations could make fintech products safer for consumers while introducing much needed competition into the financial marketplace. This is a potential win for consumers and also a potential profit center for the fintech industry.
Here’s more on the interplay between fintechs and consumer protection:
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