CBA: Most consumers want more oversight for crypto, fintech firms
Nearly 90% of Americans are concerned that crypto and fintech companies aren’t held to the same regulatory standards as traditional banks, according to results of a Consumer Bankers Association survey released Tuesday.
Concern is elevated with age, with 46% of baby boomers and 42% of Gen Xers concerned about lack of federal oversight at crypto and fintech firms. Fewer millennials and Gen Zers—24% and 18% respectively—are concerned; and college graduates (42%) are more likely to be concerned than non-graduates (30%).
“These findings demonstrate that consumers want and need policymakers to ensure large financial services providers operate within the well-regulated, well-supervised financial system,” CBA President and CEO Lindsey Johnson said in a statement. “Doing so will provide hardworking Americans the ability to safely benefit from innovations in the highly competitive financial marketplace, with the necessary regulatory transparency, oversight, and consumer protections.”
The survey, which gathered answers online from more than 1,000 adults between Dec. 2 and Dec. 4, was conducted while a storm brewed in the crypto world.
Weeks prior, crypto exchange FTX filed for bankruptcy despite founder and then-CEO Sam Bankman-Fried’s assertion of solvency.
Survey results were released days after Reuters reported that federal prosecutors were eyeing up crypto exchange Binance and its founder Changpeng Zhao for potential money laundering charges, and one day after the arrest of Bankman-Fried on charges including wire fraud.
CBA also found that 56% of those surveyed want Congress and the Consumer Financial Protection Bureau to implement more safeguards to protect users from “harm and abuse” compared to 24% who believe enough is being done.
Early this month, the U.S. House Select Subcommittee on the Coronavirus Crisis found that some fintech companies failed to stop “obvious and preventable fraud” in administering Paycheck Protection Program (PPP) loans, thus “leading to the needless loss of taxpayer dollars.”
For two fintechs, Blueacorn and Womply, their failure to “implement systems capable of consistently detecting and preventing fraudulent and otherwise ineligible PPP applications” led to a suspension from working with the Small Business Administration “in any capacity.”
Overall, consumers see banks in a more favorable light than crypto and fintech firms. Net favorability of both FDIC-insured traditional banks and of credit unions came in at +60 in CBA’s survey, with fintech’s net favorability at +32 and crypto’s underwater at -7.
Compared to crypto companies and fintech companies, FDIC-insured banks hold a 13:1 advantage in consumer trust.
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