Live on Bloomberg TV

00:00Where are we on regulation. I know that the White House has commissioned you and others to take a look at it give a report back. We're gonna get it over a period of months. But in the meantime the marketplace is going ahead. Is the government behind. Well we have to look at actually what just happened last week. A lot of people thought that a stable coin was just going to be as good as a dollar just like depositing it in an FDIC insured account. But they're learning that it's not so stable. Coins are something that all the regulators are looking at. Most stable coin use right now is really for speculative trading to go in and out of crypto currencies. And people wonder is it going to be one day used for consumer payments. And many are thinking it's not ready yet. Is it is it like a money market effectively. Well in some ways people compare it to that. But do we want that. How do we want to regulate it. And for what use when it's an investment. You know the S.E.C. is working on things. But when it comes to consumer payments it's not just stable coins. It's all sorts of emergent emerging payment technologies. We see on our mobile device and others. And we need to make sure we understand everything from privacy security and when people have errors or deal with fraud that they have some recourse. And right now many people don't know where to turn. And let's be clear it's very complicated. Certainly more company that I'm good. Understand you understand it much better than I do. But you can understand why people are out in the marketplace saying in the meantime I'm losing money and we're waiting for regulation. And it takes a lot of the crypto people are saying we want regulation we want some rules of the road. So realistically when do you think we can have some for regulation decided on. Well I think you're going to see a lot of movement this year in terms of the White House has asked all the regulators to publish a set of reports. There's already activity going on at the regulators too. To me we've got to crack this code of what do we want the future of our payment system to look like the Fed is going to be launching its new Fed now system which is going to create really real time payments for consumers and businesses. But again people need to know that that stable coin is not the same as depositing it in an FDIC insured account. Well I think you have caused some ripples and asking question about payment systems that goes beyond crypto currencies. Some of the big tech things that people say what is and where is this going. Does it work. How does this fit together from your point of view in terms of protecting the consumer. Yeah. I mean I look at what is happening in China where you see Ali pay WeChat pay so ubiquitous and combining with their broader tech businesses. You know we need to ask ourselves what do we want Google. Do we not want Facebook you know controlling a lot of flow of payments and using that data in ways we may not understand. Let's talk about something a little more traditional which is banks and bank mergers. Give us a sense of that. There is a longtime that was thought that there is a pent up demand in the regional banks for mergers. Are they getting together now. Well you do see markets pushing for some mergers. And right now at the FDIC the board has launched a review of our bank merger policy. Bank merger policy has kind of been the same for a while. But there's a big question right now to what extent does a big merged firm including regional banks. What could that cause a threat to financial stability if it failed. We saw how many of those large institutions needed bailouts the last time. And I think all the regulators want to prevent that again. We also want to make sure that rural areas are in deserts and that mergers don't lead to mass closures. We want to make sure people have a lot of choices. So and sometimes we're seeing across the economy how concentration may be limiting the ability for consumers to have choice. And frankly monopolization can bully out the next great idea. The markets have not particularly liked 20 22 so far. And then you take last week was really brutal for a lot of investors as a practitioner. Inflation is driving into tightening finance. Fiscal policy is our monetary policy is rolling in. Where does it show up in terms of consumer credit. Because I see some reports that people are putting more and more in their credit card balances. That's right. During the pandemic credit card debt outstanding actually went down quite a bit. People were paying down their balances. And then in late 2021 it started coming up again and actually quite sharply. You know I don't actually think that that's fully driven by inflation. I think that's just people are getting higher wages spending more and there's a lot of pent up demand. So we're watching that pretty closely. We want to make sure that people can shop get good rates. But I do expect it to continue to go up. Of course inflation for many households it's really pinching them especially if they're buying a car. Both new and used car prices new car prices are often selling well above you know suggested price. And so that is something that we're seeing an elevated auto loans and a lot more auto loans outstanding. So you know people are. Getting higher wages there. We're not seeing delinquency levels go up yet but depending on how the shape of the economy moves we could see that change. Are you seeing abusive practices creep in whether it's through non-disclosure or otherwise. Well across the across the markets we're always going to have scams and fraud and we're going we're looking at that. But I'm really focused on big firms that repeatedly break the law you know small firms. They often use regulators lay the hammer down on them. But a lot of the largest financial institutions even when they break the law over and over and over again it just feels like nothing happens. We are changing that mindset and making sure that the price of violating the law repeatedly is much higher than the benefits.

No schedule data available.

Stablecoins Might Not Be Ready for Payments: CFPB Head

Rohit Chopra, director of the Consumer Financial Protection Bureau, discusses the viability of stablecoins for use as consumer payments, the outlook for U.S. bank mergers, and the factors behind the growth in credit-card debt on "Balance of Power." (Source: Bloomberg)

Bloomberg Technology
The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
More episodes and clips