CFPB Goes After Tech Companies’ Payment Practices

The White House’s Next Objective in Its Push to Regulate Big Tech

The Consumer Financial Protection Bureau launched an investigation into how big tech companies including Amazon (AMZN), Apple (AAPL), Google (GOOGL), and Facebook (FB) collect and use consumers’ financial data. It marks a next step in regulators' increased scrutiny of the country’s biggest tech companies.

The CFPB sent orders to the tech companies seeking information on how they use personal payment information and manage access to customers’ data. The companies all provide financial services to consumers and have aspirations to offer even more. “Big Tech companies are eagerly expanding their empires to gain greater control and insight into our spending habits,” CFPB Director Rohit Chopra said when announcing the actions. “We have ordered them to produce information about their business plans and practices.”

CFPB Seeks Broad Information

The CFPB’s inquiry is broad, with questions covering everything from how tech companies use the data they gather to how they monetize that data. The CFPB wants the companies to answer a slew of questions and also plans to seek comments from the public.

The CFPB is also seeking information from Square (SQ) and PayPal (PYPL), two digital payment processors. The CFPB said its inquiry is part of the Federal Reserve’s efforts to make digital payments “safer, faster, and more competitive.”

Is More Regulation Coming for Big Tech?

The CFPB’s initiative is the latest move by the government to increase scrutiny of big tech. The Biden administration is stacked with officials who support more antitrust enforcement, particularly of tech companies. At the same time, both Republican and Democrat lawmakers have called for the tech sector to face more stringent regulation and oversight in their privacy and competitive practices.

The Biden administration has taken a tougher stance in policing the tech sector in a number of ways. The CFPB’s action is the latest initiative. Investors will be paying close attention to see how these investigations, hearings, and proposed regulations will impact Big Tech.

The Most Frightening Aspects of Credit Cards: High Compounding Interest Rates

It’s not necessarily a problem to have a balance on your credit card—as long as you pay it off every billing cycle. In fact, using credit cards for rewards or to build credit can be a financially healthy choice. The problem is that when you don’t completely pay off your credit card balance each cycle, the debt can quickly pile up, even if you’re making the required minimum payments.

In addition to crafting a debt repayment plan, if you’ve accumulated a large amount of credit card debt, then it might make sense to consolidate it all with a personal loan for debt consolidation. The most significant benefit of consolidating debt is that it is possible to qualify for a more competitive interest rate, which could help save money over the life of the loan. Debt consolidation loans tend to come with lower interest rates than credit cards.

A debt consolidation loan may be an option to consider if your monthly payments are feeling way too high. When you take out a new loan, you can extend the term length to reduce how much you pay every month.

It’s important to note that the longer the term length of your loan, the more you’re likely to pay in interest over the life of your loan. Still, if you’re struggling with your monthly payments, it might be worth it to consolidate your debt and extend your repayment timeline. This way, you won’t be struggling to stay afloat every month, and you’re less likely to miss payments.

Alternatively, you could shorten your term length if you’re trying to aggressively pay off your debt and get rid of it more quickly. This could help reduce the cost of interest over the life of the loan.

High-interest credit card debt is scary enough to make a werewolf’s hair stand up. But did you know that SoFi has the first personal loan that gives you rewards points to save, invest in stocks and crypto, or pay down eligible SoFi debt sooner? See if a debt consolidation loan from SoFi can help you tackle your credit card debt. Plus, get up to $1000 cash back in cash rewards.*

Crypto Miners’ Green Efforts Fall Short

Bitcoin Miners’ Emissions Problem

Bitcoin mining requires a lot of electricity, and has a bad reputation when it comes to the industry’s environmental impact. Miners have been working to change that, but so far these efforts have yielded disappointing results.

To become more environmentally friendly, cryptocurrency miners are powering their computers with green energy or are working with data centers powered by solar or wind. The declining prices for renewable energy and rising prices for Bitcoin (BTC) make using renewable energy a realistic option. Nonetheless, the majority of Bitcoin miners rely on fossil fuels to power their operations, raising the ire of investors and prompting some miners to make more of an effort to reduce their carbon footprint.

Regulation Coming Down the Pike

Because of crypto mining’s negative environmental impact, miners have created what is known as the Crypto Climate Accord, a framework calling on cryptocurrency companies to achieve net zero emissions from electricity by 2030. About 180 companies have vowed to meet that target. Cryptocurrency exchange Coinbase (COIN) is focusing on its environmental impact and plans to announce actions to address climate change in the coming weeks.

Meanwhile, lawmakers in New York State are working on a bill that would prohibit the use of fossil fuels to mine for Bitcoin. Legislators are also calling for miners to show how they are lowering their carbon footprints. The Securities and Exchange Commission is also considering rules requiring public companies to disclose data about their environmental impact.

Some Miners Have Achieved Net-Zero Emissions

Gryphon Digital Mining and some other crypto miners have already reached net-zero emissions. Gryphon Digital quickly hit this benchmark with a 21-megawatt facility that uses hydroelectric power. Gryphon also switched to a hosting company which uses renewable energy for over half its power. Of the firms mining cryptocurrency, 76% combine renewable energy and fossil fuels to power their mining operations. Still, under 40% of the total energy used to mine for crypto comes from green energy.

Bitcoin miners have an emissions problem. However, fossil fuel is still the cheapest source of energy and this isn’t likely to change in the near future. It will be interesting to see how crypto companies react to increased pressure from investors and climate activists.

Friday Fundings: HT Aero, Gorillas, and Candy Digital

Flying EV Startup Raises $500 Million in Funding Round

HT Aero, a Chinese flying electric vehicle maker, raised over $500 million in venture funding. The Series A round was led by IDC Capital, SY Capital, and XPeng (XPEV). Other investors to participate in the venture round included Sequoia China (SEQUX), Eastern Bell Capital, GGV Capital, GL Ventures, and Yunfeng Capital. The more than $500 million is the largest amount raised in a single round by a maker of low-altitude flying vehicles.

The funding is going toward research & development, and to launch a new model which can operate both in the air and on the road. The goal is to roll out the new vehicle in 2024. HT Aero is an affiliate of Xpeng, an electric vehicle startup in China.

Delivery Startup Rakes in $1 Billion

Gorillas, an online grocery startup, raised $1 billion in a round of venture funding. The round included a $235 million investment from German food delivery startup Delivery Hero (DLVHF). In exchange, Delivery Hero now has an 8% stake in Gorillas. Other investors in the funding round include Tencent (TCEHY), Coatue, DST (DST), and Dragoneer (DGNU).

Gorillas, which delivers groceries in as little as 10 minutes, launched in May of 2020. Its growth has surged during the pandemic, but it is operating in a crowded space. Gorillas is now valued at $3.1 billion. Earlier this year it had been seeking a valuation of $6 billion.

Sports-Focused NFT Company Raises $100 Million

Candy Digital, a nonfungible token company owned by Fanatics, raised $100 million in a Series A round. The fundraising included investments from SoftBank’s Vision Fund 2, Insight Partners, and Hall of Fame quarterback Peyton Manning. Candy Digital is now valued at $1.5 billion.

Candy Digital came online in June during the boom in sports-related NFTs. Sports leagues find NFTs appealing because each has a unique certificate of authenticity that cannot be hacked. Candy Digital plans to use the proceeds to scale its business, hire more staff, and roll out a beta of its platform which will run on the Ethereum blockchain.