Last year the Consumer Financial Protection Bureau (CFPB) proposed a rule to supervise non banks that provide payment services. That will include wallets and digital asset service providers. Yesterday, three senior Republicans on the House Financial Servies Committee sent a letter on the topic to the CFPB. They want it to reconsider the rule and reopen the comment period, which closed on January 8.
The regulators argue that the CFPB proposal fails to assess compliance costs and impact on competition, which could hurt consumers. When the CFPB first announced the proposed rule, it explicitly mentioned BigTech and “other large technology firms, digital payment apps and wallets” as the target. The detailed statement specified there are 17 relevant large entities. It proposed a threshold of five million annual transactions to be considered as large.
Consumer or household payments and related credit are the main functionality in scope. Hence, the rule includes digital wallets, payment, and fund transfer apps. It also covers third party service providers.
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