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The European Commission and the US Consumer Financial Protection Bureau (CFPB) have established an "informal dialogue" on issues related to consumer protection and financial services.
“The digitalisation of the financial services sector has significant implications for businesses and households, from pricing and customer service to competition and privacy,” a new joint statement from the two regulators says, as they commit to cooperating in the field of consumer financial issues.
On July 17, Didier Reynders, commissioner for justice and consumer protection of the European Commission, and Rohit Chopra, director of the CFPB, said that their “shared priorities and public mandates” meant they would start a new dialogue on matters such as digitisation and how it is affecting consumers.
“New products and services, such as Buy Now, Pay Later, are shifting the way people borrow and spend money,” the statement says, adding that digital payments are faster and more frictionless, and are increasingly offered and controlled by bigtech 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 personalised pricing for the same products and services compared to other consumers,” the joint statement says.
The regulators have said that this new cooperation includes sharing insights and experience on issues related to consumer financial products and services, with the aim of exchanging technical expertise and coordinating on the most pressing policy issues.
As well as digital payments and BNPL, the new dialogue will cover artificial intelligence (AI) and the related risks for consumers. It will also consider how digitisation can ensure fair choice and access to financial services for consumers, including the unbanked and underbanked, and its impact on privacy.
Going forward, the European Commission and the director of the CFPB will meet at least once a year.
The informal dialogue will involve staff discussions, including bilateral meetings between senior staff and subject matter experts, and roundtables, involving stakeholders that include industry representatives and consumer interest groups.
The joint statement further suggests that certain subjects may need to be addressed in a non-public format, while other issues will entail broader stakeholder involvement.
"The European Commission and the director of the CFPB expect the cooperation and exchanges within this Informal Dialogue to occur in parallel with other forms of cooperation and exchanges between the European Union and the United States on various digital and financial services policies and regulation," the joint statement says.
