By Adam Kovacevich
Recently, the Consumer Financial Protection Bureau — an agency created after the Great Recession to take on the big banks — revealed it had a new target in its sights: fintech services. In a little-noticed announcement, the consumer watchdog said that it would use a long overlooked legal provision to put fintech companies under regulatory scrutiny, a move that could have serious consumer consequences.
Fintech apps and products exploded in popularity among underrepresented consumers during the pandemic, in part because they offer better services and lower fees. Now, CFPB Director Rohit Chopra and other regulators have proposed slapping old bank rules on the new services.
In order to align financial policy with the interests of consumers, the agency should first consider why these services have caught on and remember to keep a lane open for innovation.
- Kovacevich is Founder, CEO, Chamber Of Progress.
- Editor’s Note: This article originally appeared in American Banker.