US consumer watchdog hands Wall Street rare win with Big Tech crackdown

Nov 17 (Reuters) - The U.S. consumer watchdog, not usually known to side with Wall Street lenders, has handed them a rare win by cracking down on Big Tech companies that are increasingly encroaching on banking turf...

The Consumer Financial Protection Bureau (CFPB) last week proposed regulating payments and smartphone wallets provided by tech leaders like Apple (AAPL.O) and Google (GOOGL.O), arguing they now rival traditional bank services in scale and scope and should be subject to the same consumer safeguards...

The long-anticipated move by CFPB Director Rohit Chopra, who built his career targeting Big Tech over privacy and competition issues, gives a competitive boost to lenders grappling with an onslaught of new rules from capital hikes and caps on debit and credit cards fees to tougher fair lending standards...

Subjecting large tech companies in the payments market to similar oversight as banks will increase competition, the agency said.. While tech giants rely on banks to process payments via bank-issued credit and debit cards, some - like Apple - charge lenders a fee for those transactions..

Without regulatory scrutiny, they could leverage their growing dominance of consumer payments to capture other services like lending and card issuing, analysts said.. Worried by this trend, the banking industry has been lobbying financial regulators to crack down on tech giants, arguing in public letters, blogs and congressional testimony that they are putting consumers' privacy at risk...

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