In a joint letter today, the American Bankers Association and the Consumer Bankers Association expressed tentative support for a Consumer Financial Protection Bureau proposal to regulate large nonbank firms that provide digital payments services, including P2P payments, mobile wallets and other payment apps. However, the associations had serious concerns about language in the proposal that would redefine digital assets and virtual currencies for regulatory purposes.
The proposed rule would allow the CFPB to examine nonbank payment providers to ensure compliance with applicable federal consumer financial protection laws. In their letter, ABA and CBA said it is essential that the same consumer protections provided by banks be provided by nonbanks to their customers when they offer the same services. The associations further recommended that the bureau outline its proposed examination process in greater detail to ensure that nonbanks providing such services are supervised consistently.
Still, both associations expressed concern about the CFPB’s proposed expansion of the definition of “funds” to include digital assets and virtual currencies, which would place bitcoin transactions made for household purposes under the definition of “consumer payment transaction.” They recommended the provision be dropped as the bureau gave little underlying justification for making such a substantive change. “The topic of digital asset supervision is larger than consumer protections for payments and should be subject to its own comprehensive public comment and debate process instead of being shoehorned into this rulemaking,” they said.
