I would give americans realtime access. All right. That is all the time we have. Thank you for joining us. Thank you so much to our panelists. We have anis excellent program. We have the director. We will have a quick break before then. Just stay seated and we will get you started. If everyone could take their seats, we will keep the program rolling. That was a lively and fantastic first panel that covered the waterfront from crypto currency from payment nerds to real life what do you do when you need to access your money. Real life is really the focal point of our next speaker. The director has been running the cf ptb and i would like to say whetherng you agree or disagree, they are doing. That itself is a massive accomplishment in washington that i think is under appreciated. Time is finite. The ability to effectuate change is one metric that we ought to judge Public Servants by. Whether it was for the good or for the l. I can think of very few people that are as skillful and as impactful in their career and effectuating change before becoming director confirmed unanimously to be a commissioner at the trade commission. Before that he had a prior stent finding the office as its arms for Student Loans a topic that is still impacting us very much today. At this moment, thinking about the future of our payments, a Big Conversation talking about back office and structure. We needme to now have a moment o talk about front office and how this impacts people. I can think of nobody better than the person whose sole job is tok look at this and this rpoint of view. Director, please come on up and give us some remarks and we will have a conversation. [applause] thank you, aaron and thank you everyone who helped organize this today. Let me start by saying over roughly a decade payments mostly conducted through mobile devices rapidly became ubiquitous in china. Two dominant chinese Big Tech Company services began to process millions of transactions and now millions of transactions every hour. They capture an extraordinary amount of chinese citizens personal data and the movement of money throughout the chinese economy. In 2019, facebook announced that it had hatched a scheme to create a new global currency called libra. While they have undoubtedly succeeded in capturing so much information and market share, facebook did not succeed. They did not become a new global currency for consumers but the questions it provoked for Data Protection authorities for Financial Stability watchdogs and National Security agency. Control over the flow or of the economy and the Sensitive Data generated remains alive among Big Tech Companies around the world. The historical separation of banking and commerce. A debate that traces back to the earlier day of the public. Two trends are colliding. The core banking activities and commercial financial activities. The growth of the ecommerce in our digital economy. I want to discuss digital dollars and Digital Payments from the Consumer Household and retail perspective here in the u. S. S. First int wanted to talk about w many are essential infrastructure for our society. I wantt to share some analysis from the inquiry and payment gait keepers away from the large tech firms. As well as the observations about surveillance and censorship. Finally i will close with a rgsummary of the dangers allowig very large nonbanks to issue private money outside of the Banking System. Control overpayment rails as well as policy considerations for the future. We have long known that sectors likert transportation and telecommunication are critical pieces of the infrastructure of our society. Technology that increased the speed of ships and railways dramatically changed commerce, highspeed internet, fundamentally changed how we work with colleagues around the globe and how we see family members far away. I would just argue banking money and payment is just as essential without this there could not be the trade and commerce foundational living. This infrastructure is also somewhat different relying heavily on confidence in addition to any physical or technological attribute. Banks are the primary way through which money is created and moved. When we keep money in banks we can keep it back immediately and physical cash. We can also use this bank money deposits to make the payments. As a society we give banks special treatment to issue the supply of money in our economy. We afford them access to the Public Safety net when they get into trouble so that we can ensure that for businesses that their money is safe and reliable in return we subject banks to oversight, regulation and require that they meet the needs of the community and to prevent all sorts of conflicts of interest whether it is with railways energy utilities, the yes list goes on and on. We also limit certain financial activities rather than allowing them to engage in commercial enterprise or be an arm of the larger conglomerate. It did not always work this way, banks use to issue sketchy private money and at times in our history banks in the area executives manage sweeping conglomerates with dictating the economy rather than that. The bank issued money while sexually dividing for the standard in money and payments for confidence and stability. The creation of our nation central bank, the fed was a further acknowledgment that banking and payments had important Public Infrastructure importance. The nations Payment Systems. The payment driven in part by technological adoption of the telegraphth. The said invested in an architecture that created Public Utilities for Wire Services, ach transfers and now realtime payment. To be sure, our country is not always devoted theur necessary resources to ensure fast and open Payment Options over the last few decades. During this time, lots of private gatekeepers emerged. Decades ago new private electronic Payment Networks like visa and mastercard started to grow they names, they grew over time. Ultimately, they still move money through the regulated Banking System through the backend relying heavilyco on communication rails built outside of the Federal Reserve system. At first, these networks mostly were facilitating shorttermm borrowing. Largely through charge card. Credit card. Over time,e, modern day debit cards through in a massive portion of those networks traffic. In general purpose reloadable prepaid cards were passed through selmer mobile payments. The cash out bar among the most popular. When it comes to facilitating personal payments betweennd friends and family. There are big tech firms. Dominant and retail payments. The cfpb began to study about platforms including the big tech terms. Last month at the Federal Reserve bank of philadelphia we released our analysis of cap pay features describing the regulations imposed by apple and google. We have also spent considerable time evaluating thehe complex da handling practices and privacy protocols at these firms. These firms regulations are often longg and filled with legl leaves. We often click right through them. To make things even more confusing they often refer people to other policies to refer whatg data is being ingested. How it is being used and what if any rights a person may have. While there regulations are convoluted, there are clear takeaways for us. First, these firms collect a significant amount of data about the consumers using their payment products. They useud this data for a variy of purposes including to develop , market and sell the payments, products and for a majority of them, other products and services to potential third parties. Second, these entities retain much of the data that they collect for extended periods of time. The Companies Generally break down. It would restrict their access for the product features. Take itt or leave it. Pursuing a request to delete data. It is to continue the product. If it is Data Collected to date the regulations do not appear to commit to meaningful limitations on future efforts to monetize the data. Their policies are not static and evolve over time. Each new version affords these entities opportunity to change their position on what data is collected or how it is used. It also impacts how they share those data with other parts of their corporate conglomerate including commercial businesses that they operate. As i mentioned earlier, u. S. Banks are subject to certain tirestrictions when it comes to crossownership and affiliation with commercial firms. The payment platforms just mentioned are not banks and are indeed part of big conglomerates what is the problem . The traditional lines we drill where within the sector which we drill much fuzzier recently. Big Tech Companies are taking advantage as a move into finance threatening the financial separation between thinkingg poy had payments on one side and the real money on the other. S, the cfpb has been studying how these firms decide which users get to play on the platform and who gets deplatformed and why. For example, last october, paypal updated its regulations to give itself the power to levy fines and take punitive actions against users engaged in conduct that would not otherwise violate federal or state law. Paypal withdrew the regulation. Merchant selling goods and accepting payments through these platforms also report being censored and muzzled. Many of these issues are top of mind for regulators and legislators when it comes to private digital dollars and privatized Payment Systems. In november of 2021, the Treasury Department and other federal regulators produced a report on private digital dollars. The cfpb found their report to be interesting, especially when it comes to concerns outside of the Consumer Household and retail context. For example, the report describes risks to the Financial System and to market competition, particularly if these private currencies became broadly adopted. From a consumer regulators perspective, its important to safeguard against the risk of private currencies such as the potential for destabilizing runs, intrusive data surveillance, private financial censorship, private regulations that favor the issuers commerc fial interest, and Consumer Fraud. Of course the specifications, particularly the technology specifications, and the Business Model of the currency creator and payment platform operator, may surface more risks, or mitigate many others. The november 2021 report made some helpful suggestions that would address some of these risks. For example, the report suggested that agencies explore the applicability of section one 21a2 of the glasssteagall act that prohibits nonbanks from engaging in certain types of deposit taking activities. The report also described the benefits of limiting commercial affiliations with private currency issuers and limiting the use and misuse of transaction data. And to ensure that private currencies and Payment Systems in the household and retail context do not harm consumers. We think a number of steps are warranted. First, the cfpb will be issuing supplemental orders to certain Large Technology firms to acquire more information that will help us that or ascertain their specific Business Practices and plans, especially with respect to the use of personal data and any issuance of private currency. Second, to reduce the harms of errors, hacks, and unauthorized transfers, the cfpb is exploring Additional Guidance to Market Participants to answer their questions regarding the applicability of the Electronic Fund transfer act, with respect to private digital dollars and other virtual currencies. Third, the cfpb is going to look at appropriate authorities to conduct supervisory examinations of nonbanks offering Consumer Payment platforms. We have a number of authorities to do so, such as when these firms serve as providers to large institutions. Another one of these authorities include defining larger participants in this market by rule, which would subject banks meeting a particular sized threshold to cfpb supervision. Fourth, as suggested in the november 2021 report, the Financial StabilityOversight Council should consider exercising its authority under title eight of the dodd frank act to designate this activity as likely to become a systemically important payment clearing or settlement activity. This could provide, for example, other agencies with critical oversight and tools to ensure that a stable coin is actually stable. Finally, its critically important for American Consumers to have stronger protection against excessive surveillance and misuse of our data. Later this month i will authorize the publication of a proposed rule regarding personal Financial Data rights pursuant to section 1033 of the Consumer Protection act. The rule will seek to accelerate americas shift to open, competitive, and decentralized banking, while also speaking to safeguard against abuse of our personal data. In addition, i think all policymakers, legislators, and regulators must continue to identify additional financial Privacy Protection that goes beyond the existing grammleachbliley act protections. They have totally proven to be insufficient. I hope federal legislation can provide us with more tools to deter abuses. In conclusion, i fear that the u. S. Is lurching toward a consolidated Market Structure like the one that has emerged in china, that blues the lines between payments and commerce and creates the incentives for excessive surveillance and financial censorship. A quartercentury ago with the u. S. Met with the Treasury Department and began to chart out its thinking on minting coins. Today we have many more questions to answer and challenges to overcome. As we seek to configure a paymentt infrastructure that can provide safe and secure electronic cash we should make sure the deployment of privatesector technologies and services are aligned with our valueses for Consumer Protection and our National Security. Thank you very much. [applause] was hard for me to stay seated because theres so many times i wanted to jump out of my seat in what you are saying. Often to agree that would be kind of up here so lets talk about a couple of things and they want to go in to the what you are saying. You win to a good amount of talking about separation of banking which is fundamental to the u. S. Isnt it the case, you put payments on the banking side but a different way to rebuild law is taking deposits in the making ofth loans. The payment on the commercial side of the ledger in the neutral zone so why do you, if things have dominated because they are better at it and the comparatived advantages but why in your legal mind did you put it there . So i think if you really look at our history the way in which has moved has been heavily influenced by Public Utilities approaches so if you look at how the fednd created standards for check clearing and how they created standards for Wire Services and even now it has a fundamental Public Infrastructure component partially because these are Network Businesses and in some ways they are natural oligopolies or monopolies. There cannot be 10 million Payment Systems. There could be if there was and drop her ability and other aspects but it has a function that is very much about Public Infrastructure. Ifc you look through many momens in our history we have decided that we want to be different than europe in many ways. We dont want to have national champions. We want to create a structure that provides a lot of innovationon and progress on top of these networks and they think its a place where theres a lot of room for huge amount of privatesector participation. Once it comes down to a chinese style system where you have two players tracking things lots of the retail payments, i think that introduces very real problems. I love the view of china. I went in it years ago when i came back from their and to take away i had was the most essentially planned government on earth consumers refuse to adopt cards forto merchant fees and the banks were doing nothing and that the Chinese Central Bank said you tech firms figured out and the tech firms crushed it. They are light years ahead of our technology and finding better faster cheaper services. They are a bunch of problems in terms of state surveillance and government control and all the things he flagged that their systems smokes the american system in terms of better cheaper fasteric more secure merchants for customers etc. I think you are right to draw that analogy in terms of libra and all these things that i question would have been much better if we had that system than the sy