CFPB Power Hungry? Data Breach Reveals Fintech’s Vulnerability

The Consumer Financial Protection Bureau (CFPB) recently experienced a data breach in which a CFPB employee forwarded confidential information of 256,000 consumers to a personal email account. This incident highlights the need for protection from the CFPB’s attempted power grab over fintech apps and platforms. The CFPB is seeking supervisory regulatory authority over these firms, claiming that they need to play by the same rules as traditional financial institutions to protect consumers’ money. However, fintech apps already abide by the same regulations and regulations as legacy banks. The CFPB’s proposed rule would give it access to sensitive operational and customer data, even from divisions of the firms that have nothing to do with the payment or banking service. This would provide the CFPB with extensive access to consumer data, raising concerns about its potential misuse. The internet trade association NetChoice argues that the CFPB is exceeding its authority from Congress with this power grab, and the Blockchain Association warns that the rule could extend to crypto trading platforms, which the CFPB has not established jurisdiction over. These attempted power grabs demonstrate the need for the CFPB to be subject to the Congressional appropriations process rather than getting its funds from the Federal Reserve.