On July 27, CFPB Director Chopra was interviewed in multiple publications, here and here, about, among other topics, how the CFPB could seek to help mortgage borrowers strained by the Federal Reserve’s battle against inflation and how the agency is looking at cryptocurrency. Below are some of the more important updates from the interviews.
Cryptocurrency. According to the Director, crypto raises new consumer protection questions that the CFPB is studying, including whether additional fraud-related guidance is needed amid a bevy of complaints from peer-to-peer payments users. Chopra said that “right now, cryptocurrency, including stablecoins, are not primarily used in consumer payments. They’re really used for speculative trading purposes.” Chopra pointed to guidance about the misrepresentation consumers have of deposit insurance as applied to crypto.
Litigation. Chopra said that he thinks it is “important that the agency really be willing to prove its case in court. I think we have more credibility when we can really litigate cases against well-resourced firms, who aren’t going to easily just back down and, in fact, will be willing to spend the money sometimes to litigate.”
Fraud in Peer-to-Peer Payments. CFPB Director emphasized that the agency under his direction is looking at Big Tech payment systems and they are looking very closely at how these apps operate.
Credit Card Overdraft Fees. The Director has asked his examiners to focus more attention on the institutions that have an aberrant level of their deposit account fee revenue coming from those sources. The Director said that the agency received 80,000 submissions to their request for information on fees charged in financial services.
Putting It Into Practice: In these latest interviews, Director Chopra stayed true to the mission of his agency to prevent abusive and deceptive financial practices in consumer financial transactions. As a result, the Director said that the agency would have a “heavy” focus on the adoption of cryptocurrencies for real-time payments, noting that big online firms could push widespread adoption of the technology.
About this Author
Moorari Shah is a partner in the Finance and Bankruptcy Practice Group in the firm’s Los Angeles and San Francisco offices.
Moorari combines deep in-house and law firm experience to deliver practical, business-minded legal advice. He represents banks, fintechs, mortgage companies, auto lenders, and other nonbank institutions in transactional, licensing, regulatory compliance, and government enforcement matters covering mergers and acquisitions, consumer and commercial lending, equipment finance and leasing, and supervisory examinations,…
A.J. is an associate in the Finance and Bankruptcy Practice Group in the firm’s Washington, D.C. office.
A.J. has over a decade of experience helping banks, non-bank financial institutions, and other companies providing financial products and services in a wide range of matters including government enforcement actions, civil litigation, regulatory examinations, and internal investigations.
With a diversified regulatory, compliance, and enforcement background, A.J. counsels financial institutions in matters involving…
Gabriel is an Associate on the Telecom team and the Co-Lead Associate on the Blockchain and Digital Assets team in the firm’s Washington, D.C. office. He is a Blockchain Law Professional as Certified by the Blockchain Council.
At Sheppard Mullin, Gabriel assists the Telecom team in all aspects of communications law and regulation including, satellites, spectrum, 5G implementation, media companies, and new technologies. He assists the Blockchain and Digital Assets team in legal issues relating to the use of blockchain technology, social media, internet, video games, online gambling,…
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