WASHINGTON—Following their announcement last July regarding their plans to coordinate on a range of consumer financial protection issues, the CFPB and its European counterpart, the Consumer Protection department of the European Commission, have released a joint statement highlighting some areas those coordinated efforts have identified for ongoing monitoring and particular focus.
The issue of cooperation between the two regulators is one that has drawn concern from Republican members of Congress.
The U.S. and European regulators reiterated their goals of ensuring that “consumers across the Atlantic have their financial data and privacy respected, not surveilled and misused,” keeping consumer financial markets competitive, avoiding fraud, and providing consumers with tools to navigate emerging systems.
Three Areas of Discussion
In addition, in a joint statement, the regulators identified three areas where the regulators have had “staff-level sessions” to-date:
- Buy Now, Pay Later (BNPL) & Over-Indebtedness. The European Commission expressed concerns in a recent study over European consumers’ growing debt and the expected significant increase in over-indebtedness over the next 10 years, including the surge of BNPL products. The CFPB also highlighted the growth of BNPL in the U.S., as well as aggregate borrower demographic data and the applicability of existing statute.
- Digital Payment Access. Both regulators addressed the increase in utilization of digital payments and the accompanying risk of fraud, with the CFPB focused on the increasing dominance of Big Tech firms, such as Apple and Google, in the digital payment space.
- Artificial Intelligence. The European Commission pointed to legislation and regulations aimed at addressing the use of automated decision-making and the processing of data in consumer financial services. The CFPB identified existing regulations with applicability to the use of AI in consumer financial services. Both organizations emphasized the importance of bolstering their internal technological expertise.
Plans are to Continue
The CFPB and European Commission said they have agreed to continue their efforts to coordinate their responses to emerging technologies by convening an annual principal-level meeting and bi-annual staff level meetings on these issues as well as “any other shared priorities that emerge.”