The prevalence of new and more complex financial products—and their broad availability to the public—has raised challenges for the federal agencies responsible for protecting consumers.
The Consumer Financial Protection Bureau (CFPB), established in 2010, has primary authority over many consumer financial products and services, such as mortgages, credit cards, loan servicing, and debt collection. Other federal agencies also play key roles in overseeing the products, services, and entities under their jurisdictions.
Potential areas for enhancing federal agencies’ efforts related to consumer financial protection include the following:
Blockchain finance. Blockchain allows users to conduct and record tamper-resistant financial transactions among multiple parties without a central authority, such as a bank. Blockchain-related financial products and services have expanded substantially in recent years. For example, the global market value of crypto assets was about $2 trillion in 2024. However, federal regulators have not yet fully implemented a formal coordination mechanism for addressing blockchain-related risks in a timely manner.
Financial technology and artificial intelligence. Fintech products and services—such as digital deposit accounts or credit builder products—can offer benefits including convenience, lower fees, and expanded access to financial services. However, they also pose risks, including some related to data security and privacy. A growing area within fintech is the use of AI. Financial institutions use AI in areas such as credit decisions and customer service, which can improve efficiency but also introduce risks such as biased lending, privacy concerns, and cybersecurity threats. Federal regulatory agencies face challenges in protecting consumers amid this rapidly evolving financial marketplace.
Consumer scores. Companies increasingly use numeric scores to predict how consumers will behave. Scores are based on hundreds of data points about a person’s purchases and consumer characteristics. These scores are used for things like targeting ads, helping companies collect debts from consumers, and assessing the likelihood of criminal behavior and flight risk. Unlike traditional credit scores, these scores may not be subject to consumer protection laws intended to ensure fair and transparent treatment. Congress could play an important role in establishing appropriate consumer protections for such scores, including whether consumers should have the ability to view and correct underlying data and be informed about their uses and potential effects.
Preventing scams. Scams use deception or manipulation for financial gain and can cause victims to lose substantial sums, sometimes their life savings. Many federal agencies work to counter scams, but there is no government-wide strategy to guide these efforts. Improved data collection and estimates would help agencies understand the scope of this crime and develop ways to counter it. One form of scam involves fraudulently induced payments, in which scammers exploit victims' emotions to manipulate them into sending money. Addressing this type of scam may require a multisector approach involving the telecommunications sector, social media companies, and law enforcement.
Shrinkflation. Product downsizing, or “shrinkflation,” occurs when manufacturers reduce the quantity of an item without lowering its price. While this effectively raises prices, its overall effect on inflation is small because most spending is on goods and services that cannot be downsized. However, certain products, like coffee and cereal, are affected more. Policy options exist to increase transparency—such as requiring disclosure or standard unit price labeling—but they face challenges, such as how to identify and enforce noncompliance.
