October 28, 2021

At Hearing, New CFPB Head Agrees with Warren: Rein in Big Tech to Protect Marketplaces, Small Businesses, and America's Families

Big Tech’s rapid growth in our payments system poses risks to consumers, small businesses, and marketplaces

Video of Hearing Exchange

Washington, D.C. - Today, during a hearing of the Senate Banking, Housing, and Urban Affairs Committee, United States Senator Elizabeth Warren (D-Mass.) called for regulators to use every tool at their disposal to protect consumers, small businesses, and marketplaces from the rapid growth of Big Tech companies in our payments system.

Last week, the Consumer Financial Protection Bureau (CFPB) ordered large technology companies that operate payment platforms to provide information on how they utilize consumer data. In response to her questions, Rohit Chopra, Director of the CFPB, agreed with Senator Warren that we have to “work all together to protect consumers, protect businesses, and frankly, to protect our country” from Big Tech’s infiltration into sectors of our economy. Director Chopra also confirmed that the CFPB has a role to play in policing these companies, indicating there may be places where we need to bring enforcement actions and issue guidance or rules to make sure that there is not a “roll over and play dead mentality” when it comes to policing these powerful firms. 

Transcript: New Era for Consumer Protection: The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress
U.S. Senate Committee on Banking, Housing, and Urban Affairs
Thursday, October 28, 2021

Senator Warren: Thank you very much.

Director Chopra, it is good to see you here in front of this committee for the first time as the confirmed Director of the CFPB. I know that you're going to help make our consumer financial markets both fairer and more transparent, and that’s going to help millions of American families.

So, today I want to ask you about an emerging trend in consumer finance: the rapid growth of Big Tech companies in our payments system. So, Big Tech platforms, like Venmo, and Square, and Apple Pay, and Facebook Pay, have multiplied in recent years. 

So, Director Chopra, a giant company like Amazon owns an online marketplace, a cloud-computing platform, a chain of grocery stores, and a payments platform, is that combination a risk for consumers?

Director Chopra: Yes, and it’s a risk to small businesses, too, Senator. And that’s part of the reason why I issued these series of orders, including to Amazon, Apple, Facebook, and Google, to understand what are they doing with this data. How are they going to decide who gets admitted and who they're going to kick off. And is it going to be distorted by their own financial incentives.

Senator Warren: And their own financial incentives here meaning when they've got that kind of information. What is it that they can do?

Director Chopra: Well, they can do a lot. And I don't think all of it is very good. Look at what Apple has done in its app store context. There's allegations that as soon as there's an app on the app store that competes with one of Apple's, they go in for the kill, charging higher commissions, higher fees. If our payment system and the flow of our currency is distorted by this, that is a real harm to consumers, and not just to their privacy, but to the options that they have.

Senator Warren: Good. Not good. It's a terrible thing, but I appreciate your making this point because the risks are real, and I am glad to see that the CFPB is requiring these companies to provide data on how they operate their payment systems. It is long past time for transparency in this space.

Now, you saw these companies up close and personal when you were an FTC Commissioner, so I want to ask you a different question. Do you think we can trust these companies on their own to put in place the safeguards that are necessary to make sure that consumers and small businesses that use these payment platforms don’t get ripped off, or do you think you need a cop on the beat like the CFPB? 

Director Chopra: Well, one of the problems is that when I arrived to the FTC, there was a clear bias in favor of these firms. Take Venmo. Under Republicans and Democrats, the FTC just let them off the hook with a no-money, no-fault settlement that did almost nothing to fix things. Facebook violated its order over and over again, and the FTC's response? An immunity clause for Mark Zuckerberg and Sheryl Sandberg. We need to make sure that it’s not just the FTC. It’s not just the CFPB. Every single government agency is being impacted by how Big Tech companies are infiltrating sectors of the economy. It's not just going to be one of us. We have to work all together to protect consumers, protect businesses, and frankly, to protect our country.

Senator Warren: That's a powerful point. You know we've already seen Big Tech use their size and use their scope to rig marketplaces, and there’s no reason to believe that they're going to be any different as they infiltrate payment systems here.

But as you indicated earlier, we are not powerless here. I know that you took these companies on while you were at the FTC, and that that work continues under FTC Chair Khan. But, to the extent that financial products like payments platforms are part of the equation, the CFPB has an important role to play here. Can you talk about just a few of the ways in which the Bureau can actually help level the playing field?

Director Chopra: Well, we have a whole host of tools including with respect to our partnerships with the prudential banking regulators, but of course, we administer laws, like the Electronic Fund Transfer Act, like the Gramm-Leach-Bliley privacy provisions. There may be places that we need to bring enforcement actions, or issue guidance or rules to make sure that there is not a roll over and play dead mentality when it comes to policing these powerful firms.  

Senator Warren: Well, and I very much appreciate your focus on the importance of protecting personal data. And I know that that's going to be an important role for the CFPB. Look, I’ve made my position clear: I think these companies have far too much power and they should be broken up. But in the meantime, we need our regulators -- all of our regulators -- using every tool that's available to them to make sure that they protect marketplaces, that they protect small businesses, and that they protect America's families. So, thank you very much for your work. Good luck to you.