The CFPB Proposes New Oversight of Big Tech Companies and Digital Wallet Providers
The United States Consumer Financial Protection Bureau (CFPB) has put forward a new rule that would allow it to oversee large non-bank digital wallet and app providers. This expansion of supervision is part of a broader effort by the agency to increase its oversight in various consumer financial markets.
The proposed rule would extend the CFPB’s supervisory role beyond banks and credit unions to include companies that handle over 5 million transactions per year, such as PayPal, Apple, Amazon, Google, and Meta. The agency’s statement highlighted that these big tech and other companies operating in consumer finance markets pose potential risks to consumers due to the blending of banking, payments, and commercial activities.
CFPB director Rohit Chopra emphasized that the rule aims to address regulatory arbitrage. The agency pointed out that while digital apps have a user base similar in size to credit and debit cards, they currently lack certain protections like deposit insurance and privacy guarantees. Although the CFPB already has enforcement authority over tech companies, this rule would expand its supervisory role.
Hot Take: Big Tech Under Increased Scrutiny
The CFPB’s proposed rule represents a significant step toward regulating big tech companies and digital wallet providers within the consumer finance space. By seeking to close regulatory gaps and ensure consumer protections, the agency is addressing the potential risks posed by the blurring of traditional financial lines. This move could have a substantial impact on how these companies operate and provide services in the future.
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