The CFPB today took steps to regulate large nonbank firms that provide digital payments services, including P2P payments, mobile wallets and other payment apps. The bureau proposed a new rule that would establish its supervisory authority over certain nonbank covered persons participating in a market for “general-use digital consumer payment applications.”
The proposed rule would allow the bureau to examine nonbank payment providers to ensure compliance with applicable federal consumer financial protection laws, and would provide a more consistent regulatory framework between non-depository and depository institutions, the CFPB said. ABA has long held that companies providing bank-like services to consumers should be subject to the same rigorous regulatory standards as banks.
The proposed rule also has implications for an ongoing CFPB proposal to implement Section 1033 of the Dodd-Frank Act, which relates to personal financial data rights, as it would create a regulatory lever for the privacy and security requirements envisioned for the Section 1033 ecosystem, at least among some participants. Comments on the proposal are due by the later of either Jan. 8, 2024, or 30 days after publication in the Federal Register.