Banking Blog

Finance Blogs » Banking » CFPB, meet FarmVille

CFPB, meet FarmVille

By Marcie Geffner · Bankrate.com
Friday, August 19, 2011
Posted: 10 am ET

Should the federal government regulate virtual currencies as if they were home loans, bank accounts or other consumer financial products?

That question popped up this week in a comment letter the American Bankers Association, or ABA, submitted to the Consumer Financial Protection Bureau, or CFPB. The letter expressed the Washington, D.C.-based trade association's views about the federal agency's effort to sort out which larger non-bank consumer financial product companies will be subject to its oversight.

The issue wasn't mentioned in the CFPB request for comment published in the Federal Register. But in a few sentences, the ABA suggested that virtual currencies should be part of the CFPB supervisory responsibilities, basing that argument in part on the fact that virtual currencies reportedly have been used to pay developers of these applications and that the use of such currencies "can be expected to expand even further."

Virtual currencies are used for commerce within online games and virtual worlds. Participants can spend the currency, usually points or credits, to buy virtual properties, avatars, products, services or, more often, special abilities and privileges that might give them a competitive advantage or greater enjoyment of the activity. In some cases, virtual currency earned online can be bought and sold elsewhere in real-world dollars, though this trading may be prohibited by the game or world publisher.

It's conceivable that virtual currency could be used for financial mischief or fraud, especially since these points or credits can be purchased with real-world money and escape the game or virtual world within which they were created and earned. But does that mean the CFPB should look into virtual currencies? Or are consumers well enough protected by other laws and the rules of the games and worlds themselves?

What's your opinion?

Follow me on Twitter: @marciegeff

Want to win a trip to L.A., a pass to BlogWorld and $500 of spending money? Enter Bankrate’s sweeps on our Facebook page. Invite your friends to enter to earn more chances to win. Good luck!

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
elle
August 19, 2011 at 8:33 pm

this sounds like banks want to take eyes off themselves and make busy work for CFBA or perhaps, if the banks get the agency to do silly stuff the Rs can make a case that this agency should be defunded.......some kind of gaming here, be sure of it