Consumer Bureau Announces Cooperation with Europe on Consumer Finance Issues

International action critical in digital finance marketplace

The Consumer Financial Protection Bureau (CFPB) announced it is beginning a dialogue with its counterpart in Europe, the Commission for Justice and Consumer Protection of the European Commission on key consumer protection issues related to the digitalization of finance.

CFPB Director Rohit Chopra and Commissioner Didier Reynders announced a broad framework for cooperation on issues related to consumer finance.

In a statement, the two noted:

"Financial institutions have expanded their deployment of automated decision-makingg, including the use of artificial intelligence(AI). New products and services, such as Buy Now, Pay Later, are shifting the way people borrow and spend money. Digital payments are faster and more frictionless and are increasingly offered and controlled by Big Tech companies. These developments, if left unchecked, could increase consumers’ exposure to fraud and manipulation, limit their product options over time, threaten their control over their own data, and force them to accept more expensive personalized pricing for the same products and services compared to other consumers. Policymakers on both sides of the Atlantic are responding to these issues, but we must do more to compete with the pace of evolving markets and consumer needs."

Among the issues the two bodies will discuss:

Automated decision-making and processing of data in financial services, including the deployment of AI, and the related opportunities and risks for consumers such as the lack of transparency, misuse of data and violation of financial privacy rights, discrimination, and exclusion.

New forms of credit such as ‘Buy Now, Pay Later’ products, and the related risks to consumers, including over-consumption and over-indebtedness.

The two agency leaders will meet once a year to discuss challenges and opportunities in consumer protection in the digital finance realm and their respective staffs will maintain open dialogue around these and other issues impacting consumers in the evolving financial marketplace.

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