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Hi fintech friends, John here.

If you haven’t already, you should be a good person and subscribe to Crypto Tonight, hosted by Parker Jay-Pachirat. I’m now in a text thread with her and Julie and it’s been the highlight of my day and glad to have two people smarter than me telling me things.

Anyway, Rohit Chopra, newly ensconced Director of the Consumer Financial Protection Bureau (CFPB, or, ‘The Bureau’ to those who forget about the FBI), has been busy! Especially considering he’s only been in the job for about two weeks.

He testified for over four hours yesterday in front of the House Financial Services Committee (HSFC). He made clear that the Biden Administration is committed to restoring the strength and presence of the CFPB as a check on the financial industry. It may be obvious to you, but Democrats feel like the Trump Administration neutered the CFPB. Republicans do not feel that way and/or feel like the pull-back was justified and good. Whatever. You get it. That’s where we are and where Chopra is, so here are two highlights - or lowlights - depending on your perspective.

Big Tech

Super hot right now to be taking on Big Tech. When people say “Big Tech”, I guess they typically mean Amazon, Apple, Facebook, Google, Netflix, etc. Amazon has been accused of using data to work against their third party sellers. Apple, a company that makes visual screens to keep children quiet, has been accused of doing bad things with their App Store. Google has been accused of data things and search unfairness things, and Facebook has been accused of a lot of things. Netflix, a well-known true-crime documentary streaming platform, has been accused of constantly suggesting numerous documentaries about race car drivers when I’ve never shown an interest in race car drivers. They are also the last remaining company in the US to not launch a buy now pay later capability, signaling their hesitancy to innovate.

Throughout the hearing, he targeted big players in finance and tech. We sort of expected this considering the letter he sent to Amazon, Apple, Facebook, Google, PayPal and Square last week, asking them for info on their payment systems and how they are using consumer data. His testimony indicates that he’s just getting started.

Section 1033

There was an interesting exchange between Chopra and Congressman Ritchie Torres (D-NY), deftly captured by my colleague, Andy Barbour. ICYMI, Section 1033 of the Dodd Frank Act establishes the right of consumers to access and transfer their own financial information. In an executive order, President Biden called on the CFPB to finalize its rule, which means to actually implement it. Dodd Frank was enacted 11 years ago, for those keeping score.

Rep. Torres asked Chopra to commit to a timeline to finalize the rule and Chopra demurred, citing the fact that he’s only been in the job for two weeks. In my opinion, and not to be provocative, this is what some might call, “a good point.” He said Section 1033 was, “a great opportunity for all of us,” and that there was a “process underway.”

But, Torres pressed Chopra further and queried if a consumer were to ask a bank, “to share their financial information with a competing financial institution, should the bank be required to comply with that request?”

Chopra didn’t answer the question directly, but he did say people should be able to control their own data. He expressed concern that tech companies are, “collecting all sorts of highly detailed information on us,” and he wanted to ensure that the U.S. didn’t end up having a “surveillance style system” akin to China. That comparison may reveal a bit of the thinking here. Yikes.

Stablecoins

There was comparatively little about crypto in Chopra’s testimony, but stablecoins were definitely on the menu. Tying into his letter to the Big Tech firms, and skepticism of Big Tech’s involvement in financial services generally, he said, “Stablecoins are right now primarily used for speculative purposes….But one could imagine that if it starts riding the rails of some of the large networks or big tech companies it could scale very, very quickly.” Read: Facebook’s Novi project. The CFPB is a key contributor to the soon-expected Presidential Working Group on Financial Markets’ report on stablecoins. More on that below.

TLDR

Katy O’Donnell at Politico has a more comprehensive look at Chopra’s hearing, which you should read. And I think her overall assessment of the current posture of a Democratic party controlled Washington is spot on: “Lawmakers will be focused on many of the same consumer protection issues that dominated these hearings eight or nine years ago, including the abusive standard, ability-to-repay mortgage rules, overdraft fees, payday lending and data privacy and security. This time around, however, the targets of scrutiny may more likely be in San Francisco than New York.”

Other nits and bits and such

• CLOSING THE STABLE DOOR AFTER THE REPORT HAS BOLTED: We’ve been expecting the report on stablecoins from the U.S. Treasury and other agencies for Two Weeks (™), for a few months. We might be getting to the end of the perpetual Two Weeks fairly soon. Maybe not! But maybe yes. Keep your head on a swivel
• GENSLER TO GENSLER NEXT WEEK: SEC Chair Gary Gensler is giving a speech at the SIFMA Annual Summit. That’s a big event, with a big speaker, and a good opportunity to announce things. Probably worth watching.
• TUNGSTEN JUNCTION: If you have made significant mistakes in your life, you probably are exposed to crypto twitter (CT). If there, you may be familiar with Neeraj Agrawal, an up-and-comer who is someone to watch in the crypto space. Despite (or perhaps because) he is significantly older than the average crypto user, he brings a thoughtful, seasoned, boomer-lite approach to crypto centered social media. He allegedly does comms for Coin Center, the premier crypto think tank and advocacy group in Washington, DC, but he’s probably best known for his Tungsten content. He was featured in the WSJ today because he bought a tungsten cube and then he tweeted about it. There’s a beautiful picture of him featured in the article, with the thought-provoking caption, “Neeraj K. Agrawl of Coin Center contemplating his Tungsten cube.” Worth a read and supporting his efforts to come.

Ok, thanks all and see ya in two weeks! While I won’t guess what the price of Shiba Inu (SHIB, ugh) will be when I’m back, I will say that there will likely be a lot that happens between now and then...

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John Collins is a Founding Partner at FS Vector, a fintech regulatory advisory firm based out of Washington, DC, where he leads the firm’s public affairs and regulatory strategy group. Prior to that he was a senior staffer in the U.S. Senate and helped lead the American Bankers' Assocation international fintech policy work. He was early employee of Coinbase, where he served as Head of Policy, explaining the company (and bitcoin) to policymakers around the world.