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May 08, 2024

Team Member Renee Spurling

Renee Spurlin


Executive Vice President

Last year was challenging for fintechs. Global fintech funding dropped 50% compared to the previous year, and the macroeconomic climate caused some companies to contract. The good news is that industry analysts anticipate a rebound for fintechs in 2024, with subsectors like payments continuing to account for the largest share of growth.

But with growth comes another challenge: greater oversight from the Consumer Financial Protection Bureau (CFPB). Recent actions against non-traditional financial institutions signal more scrutiny ahead for tech-enabled financial providers.

Here are the top three areas the CFPB is moving on that could shake up fintech - and marketing strategies - in 2024:

  1. Transparency on remittance speed and fees: Remittances are growing as more consumers rely on money transfer services to send funds to family and friends across borders. In 2023, global remittance flows reached $669 billion. With this growth comes new providers, which are entering an already noisy landscape. To stand out and win market share, some are promising cutting-edge services like instant transfers and low fees. Amidst the buzz, the CFPB recently issued an advisory warning that false advertisements about the cost or speed of a remittance transfer can violate federal law. This includes providing temporary lower fees to attract consumers while burying the promotional period in the fine print, and deceptively advertising how long a remittance transfer will take. Fintech marketing teams will need to revisit promotional language to ensure compliance, taking care that claims are accurate, clear and easy to read.

  2. Earned wage access laws: Bills have been brewing at the state level on applying lending laws to earned wage access (EWA), a modern on-demand pay strategy that enables workers to access their pay after a full day’s work. Many providers are starting to offer this service, and the fees associated may classify the transactions as advanced loans. As more regulatory bodies weigh in, several regulations are on a collision course. For example, despite a CFPB opinion stating that EWA can’t be considered credit or loan services if a fee isn’t charged, states like Connecticut are passing EWA laws requiring all providers to be licensed as small loan providers - even if they aren’t imposing fees. It will be crucial for marketers associated with EWA to carefully review the upcoming CFPB guidelines, which will provide a clear and consistent framework, and update both product pricing and consumer communications accordingly.

  3. Consumer rights to access and share their financial data: Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the CFPB is working to finalize an open banking draft rule enabling consumers to easily transfer their data between financial service providers. The premise of this rule is to give consumers the right and power to control and share their data with companies of their choice. However, banks argue that it will bring significant risk management requirements to ensure their interfaces are viable and resilient. As such, they are pushing to impose fees on fintechs to access consumer data. In response, fintechs contend that banks can unnecessarily inflate fees to lessen market competition. The CFPB is considering these arguments as it prepares to finalize its ruling this year. The ultimate decision could have a significant impact on consumers as well as how marketers store customer data, making it a key rule to follow.

Closely monitoring CFPB decisions is vital for marketers to ensure compliance as well as engage and retain customers. Need help staying ahead of the curve in the highly competitive fintech market? Let’s chat.