Digital payment apps continue to grow in popularity, but they don’t play by the same rules as big banks, credit unions, and other financial institutions. The Consumer Financial Protection Bureau (CFPB) is proposing to change that.
If the proposed rule is finalized, approximately 17 of the largest payment app companies (including Apple Pay, Venmo, and Cash App) will be subject to consumer protection laws governing privacy rights, money transfers, and unfair, deceptive, and fraudulent conduct. You will have to follow. Abusive acts and practices.
“Fraud and fraud would be very high on the list of risks we’re looking for,” said Shiva Nagaraj, a senior adviser at the CFPB.
“Thus, this rule will subject the largest non-bank players in the payments market that offer mobile wallets and P2P apps to our vetting process. That means sending a government official to check the books and records, talk to executives, and look at actual transactions with consumers to see if any laws are being violated. It means that. We are confident that they are keeping consumer funds and data safe. ”
“As you know, banks have very strong federal and state government oversight. But that’s not the case with these big technology companies,” Nagaraj added.
“By our estimates, these 17 companies collectively conduct more than 10 billion consumer transactions annually, which translates to nearly $2 trillion. It will only increase over time.”
Consumers can submit comments on the CFPB’s proposed rule here.
Comments must be received by January 8, 2024, or 30 days after the rule is published in the Federal Register, whichever is later.
“Once we receive the comments, we will digest them, carefully consider them, and decide whether to finalize the rule. If we do, I think it will happen at some point in 2024.”