CFPB Instructs Major Tech Companies to Provide Payments Information

The CFPB recently issued several orders instructing six major tech companies to provide information about their payment services products, plans, and practices.  The orders were issued under Section 1022 (c)(4) of the Consumer Financial Protection Act, as the CFPB seeks to understand how the companies are using their payment services and how the services may affect consumers.

According to the CFPB, these tech companies have embedded their payment services alongside other services. As a result, the CFPB has several questions it hopes to answer with this inquiry. The CFPB wants to know if the payment platforms will disrupt fair and competitive markets and if the platforms will be “truly neutral.”  The CFPB is also interested in how the tech companies will interact with small businesses that use their platform: will small businesses feel pressured to use the platform and how will tech companies decide whether to delist a business?

The CFPB also stated that it has concerns about consumer protections.  The CFPB wants to ensure the payments platforms make sure that there are enough staff members working on consumer protection issues should something go awry and to address disputes, errors, and complaints.

The CFPB notes that its inquiry is part of a larger effort within the Federal Reserve System to ensure fair and competitive payment systems as real-time payment platforms evolve. This inquiry seeks to provide information to regulators about this evolution to help implement statutory responsibilities and rulemaking under the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

The CFPB will soon invite public comment.