Regulatory bodies CFPB and European counterpart engage in discussions regarding digital regulations
In an effort to address the evolving landscape of digital finance, Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB) in the United States, and Didier Reynders, the European Commissioner for Justice within the European Union, will engage in regular informal dialogues.
The dialogues, which will run parallel to other forms of cooperation and exchanges between the European Union and the United States on various digital and financial services policies and regulation, aim to focus on developments in pricing, privacy, and other significant issues affecting businesses and households.
Last month, Rohit Chopra highlighted the problems customers face when advanced technologies like artificial intelligence affect their experience with banks. The CFPB, in its BNPL report in September, identified concerns with consumers overextending themselves, and the report also raised concerns about companies engaging in data harvesting.
The regulators are concerned about the potential for consumers' exposure to fraud, manipulation, limited product options, threats to data control, and more expensive personalized pricing due to digitalization. The initiative will also aim to ensure accessible financial services to the unbanked, underbanked, and consumers wanting to protect their data.
In 2022, roughly 37% of Americans interacted with a chatbot for bill payments, transactions, or other services, with the number expected to grow. This digital transformation could lead to customer frustration, reduced trust, and potential legal violations. The dialogue will address risks to consumers from buy now, pay later platforms, including over-consumption and over-indebtedness.
Roundtables involving stakeholders and industry representatives may also be part of the dialogues. The CFPB and the European Commission will exchange technical knowledge to improve policy and regulatory issues.
Rohit Chopra has been vocal about the impacts of technological innovations in the financial sector, and Chopra and Reynders will meet at least once every year with bilateral meetings between senior staff and subject matter experts. Certain subjects may be discussed publicly, while others may require a more private discussion.
The dialogues are set to commence, marking a significant step towards ensuring a secure and fair digital financial landscape for consumers on both sides of the Atlantic.
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