The Consumer Financial Protection Bureau (CFPB) has issued a consent order against fintech firm Chime, Inc., also known under the operation of Sendwave. The sanction is in connection with allegations that the company violated the Electronic Fund Transfer Act (EFTA) and associated regulations. The CFPB also alleges violations of the Consumer Protection Act of 2010.
Central to the controversy is the claim that Chime deceived its customers regarding the speed and expenditure of its international money transfer services—popularly known as “remittance transfers”—which it offered via its mobile application, Sendwave. This development, while not singularly unique within the fintech industry, is notable given the increasing scrutiny of such businesses concerning their compliances with financial regulations, and the protections they afford to consumers.
The CFPB’s move against Chime, which aims to strike a correct and reasonably fair balance in regulatory actions, is emblematic of the wider efforts by regulatory bodies to ensure fintech firms’ practices align with legal mandates and offer consumers transparent, sound, and secure services.
It is in the interests of all corporate businesses and law practitioners to closely monitor these developments, keeping pace with regulatory shifts, and ensuring that their operations or their clients’ businesses remain compliant, thereby avoiding potential future litigation or sanctions.