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| CFPB Authority Over Large Consumer Payment Apps |
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The CFPB finalized a rule Thursday defining larger participants in general-use consumer payment applications, thereby subjecting them to the bureau’s supervisory authority. America’s Credit Unions submitted comments in support of the proposal in January, noting it would “address regulatory gaps that currently exist within the market” for consumer payment applications that are otherwise permitted to avoid regular, federal supervision.
“America’s Credit Unions is supportive of measures that level the playing field between fintechs and credit unions. We are pleased with the CFPB’s final rule to provide proper oversight of entities offering digital payment products and services,” said America’s Credit Unions Chief Advocacy Officer Carrie Hunt. “Consumers look for cutting-edge technology and swift access to their finances when deciding which institution to trust for their financial health. This final rule is an appropriate use of the CFPB’s authority and will ensure credit unions maintain safe and accessible services that 140 million Americans want and remain competitive in a growing market.”
Apps processing 50 million or more transactions per year (in U.S. dollars only) will require supervision in key areas under the CFPB, including:
• Privacy and surveillance;
• Consumers’ rights to dispute transactions that are incorrect or fraudulent;
• Debanking through lost access to the app or the ability to make or receive payments.
The CFPB previously had enforcement authority over these companies, but the rule gives the CFPB the authority to conduct proactive examinations to ensure companies are complying with the law in these and other areas.
The CFPB estimates that the most widely used apps covered by the rule collectively process over 13 billion consumer payment transactions annually.
America’s Credit Unions continues to support leveling the regulatory and supervisory playing field to ensure consumers are protected.
Copyright 2024. America’s Credit Unions. (link) |
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