NC attorney general wants cash apps regulated by CFPB

Photo Credit: Getty

CEI’s John Berlau is cited on the North State Journal on CFPB regulations in North Carolina:

John Berlau, senior fellow and Director of Finance Policy at the Competitive Enterprise Institute, sees major problems with the move. 

“This is a solution in search of a problem that will lead to many other problems including possible jawboning of an industry with a political agenda,” Berlau told North State Journal. “It’s not needed and could cause many, many problems including the problem of politicalization.” 

Berlau said such rules are not needed because financial technology apps, sometimes referred to as Fintech, already have a regulatory framework in banking. 

“The banks – that are more like Chime and Dave – the bank that they’re connected follow the laws for regulation and deposit and deposit Insurance like any other bank,” said Berlau. “And then there’s also money transmitting, which was around when the FDIC was created in the 1930s and [has] been around for more than 100 years.” 

Berlau also says he’s not seeing complaints in the attorneys general letter to the CFPB. 

“The attorney generals aren’t really citing any consumer complaints about fintech specifically and if there were specific consumer complaints, the CFPB would already have authority just to investigate and to discipline for those complaints,” Berlau said. 

“We don’t want to give the CFPB that kind of power and it’s not clear from the from the law [that] they have that kind of power,” he added.  

Berlau acknowledged the CFPB has been accused of overspending, failure to protects databases, and its lack of accountability.  

“One of the things that needs to be asked is they’re talking about “we need to CFPB to protect people’s data,” but what are the restrictions on the CFPB if it can view everything – including customer transactions?” asked Berlau, who went on to question oversight of the CFPB to actually safeguard citizen data and not give it “willy-nilly data to agencies like the IRS.” 

“That’s the thing – they get their funding from the Federal Reserve rather than through the Congressional Appropriations process, so they don’t answer our elected representatives,” Berlau said about the lack of oversight over the CFPB.  

Read the full article on North State Journal.