Senator Sherrod Brown warns Americans to be careful about putting their money in ‘fintechs that want to act like banks’

Sen. Sherrod Brown says that fintech companies don’t have “consumer protections and safeguards that actual banks must adhere to.”Bill O’Leary/Pool via REUTERS

  • Sen. Sherrod Brown urged Americans to be wary of fintech banking apps.

  • He says that consumers are vulnerable to losing access to their money through the services.

  • Fintech banking services have surged in popularity since the beginning of the pandemic.

Americans should beware of using banking services offered by fintech companies, US Senator Sherrod Brown told Insider.

Brown, who is the chairman of the US Senate Committee on Banking, Housing, and Urban Affairs, warned that fintech companies that provide online banking services — sometimes called “neo-banks” — are potentially dangerous, and make users vulnerable to losing their money.

“Fintech companies that want to act like banks – but without the consumer protections and safeguards that actual banks must adhere to – put people’s hard earned money at risk,” he said. “Consumers shouldn’t be getting locked out of their accounts, leaving them with no way to access their money to buy groceries, pay their bills, or make rent.”

Brown’s warning comes on the heels of a recent investigation by Click2Houston.com’s Amy Davis, which found that some users lost thousands of dollars through Chime, the most popular neobanking app in the US by far. Users lost their money through suspensions due to deposits marked as “unusual activity” that locked them out of the app, as well as a refusal to reimburse some people for hacking. Click2Houston also reported that the Consumer Financial Protection Bureau has received more than 2,267 complaints about Chime since 2020, with many users complaining about frozen accounts and fraudulent transactions that Chime refused to reverse.

“Given the important role we play in helping our members manage their money, we take our responsibility in the areas of regulation and compliance very seriously,” a Chime spokesperson told Insider in a statement. “Chime products are designed…

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