Rohit Chopra, the head of the US Consumer Financial Protection Bureau (CFPB), called for ramping up consumer protection against payment systems. The watchdog is pushing for regulatory action to curb excessive user surveillance by tech corporations resembling the Chinese model. Proposed measures would require big techs to disclose information on their handling of user data, including financial activity.
Chopra warned that "the US is really lurching towards a market structure that's more like we see in China. One that is fueled by a lot of surveillance and even censorship. One that actually mixes up banking payments with commercial activities."
He added that the US has a history of trying to separate the banking industry from the real economy so that it supports business rather than does business on its own. The CFBP director made his claims speaking in a panel discussion hosted by the Brooking Institute on Friday and repeated them in an interview for Yahoo Finance.
Chopra has found himself in a difficult position as possibly the single most hated regulator in the financial industry. According to a recent article in The New York Times, bankers call him reckless and consider a "regulator gone rogue."
The watchdog made his name targeting violations related to the finance of everyday Americans. Last week, Chopra had to face the backlash from a trade group representing payday lenders, heard by the Supreme Court in a case with the potential to threaten the CFPB's future.
The suit filed by the Community Financial Services Association of America claims that the CFPB's funding scheme has been unconstitutional due to the fact that the bureau receives direct funding from the Federal Reserve instead of receiving the money from the Congress on an annual basis through the allocation mechanism.
The CFPB has already lost one battle. In October 2022, the US Court of Appeals for the Fifth Circuit ruled that the agency's funding method violated the Appropriations Clause of the Constitution, which states that "no money shall be drawn from the Treasury, but in consequence of appropriations made by law."
If CFBP loses the war, the fallout will affect everyday consumers, increasing their vulnerability to big tech and payment companies with their voracity for personal and financial data.
