Thursday, July 11, 2019

Federal Reserve Must Protect Economy and Consumers from Facebook’s Monopoly Money

Washington, D.C. - July 11, 2019 - (The Ponder News) -- U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – is demanding the Federal Reserve provide detailed answers to how they will upgrade the payments system to prevent critical economic infrastructure from being controlled by powerful special interests.

In June, Facebook unveiled details of its proposed currency, Libra. This new currency will give Facebook competitive advantages with regard to collecting data about financial transactions, as well as control over fees and functionality. On May 9th, Ranking Member Brown and Chairman Crapo sent a letter to Facebook requesting information about their privacy practices as well as their currency announcement.

“For example, Facebook recently announced its plans for “Libra,” a digital currency backed by a basket of global currencies and other assets to be governed by a group of private companies, including Facebook. This could have far-reaching consequences for billions of individual consumers and the broader financial system, raising data privacy, systemic risk, and anti-competitive concerns,” wrote Brown.

Brown went on to write, “We cannot allow giant companies to assert their power over critical public infrastructure. The largest banks and the largest tech companies do not act in the interest of working Americans, but in the interest of themselves and their investors. The Fed must take a proactive role to ensure that the payments system remains accountable to the public.”

Ranking Member Brown has raised concerns in the past over technology companies getting involved in the business of banking, including opposing the OCC’s plan to create a special charter for financial technology companies that would provide them the benefits of a bank charter without requiring the strict regulations other banks face.

Read the letter here