Proposal Would Subject Digital Wallet and Payment App Providers to Bureau Supervision.

The Consumer Financial Protection Bureau (CFPB) has proposed a rule that would subject larger nonbank digital payment application providers to Bureau supervision. This proposal is based on the Bureau's authority under the Consumer Financial Protection Act to designate for supervision any nonbank covered person that poses risks to consumers in the offering or provision of consumer financial products or services. The proposed rule aims to ensure compliance with federal consumer financial law, monitor for new risks, and level the playing field between nonbanks and depository institutions. The rule defines "larger participants of the general-use digital payment market" as entities with an annual covered consumer payment transaction volume of five million or more, excluding small business concerns. Congresswoman Maxine Waters has praised the proposed rule for protecting consumers regardless of whether they use traditional bank accounts or digital wallets. Comments on the proposed rule are due by January 8, 2024, or thirty days after publication in the Federal Register. [Extracted from the article]