CFPB increases supervision of digital payment services such as Apple Pay, Cash App, PayPal, and Zelle

The Consumer Financial Protection Bureau has issued a rule that will soon allow it to supervise nonbank firms that offer financial services like payments and wallet apps. Tech giants and payments firms that handle at least 50 million transactions annually, including Apple, Google, Amazon, PayPal, Block, Venmo, and Zelle, will fall under this new scrutiny. The rule is meant to ensure that newer entrants adhere to the laws that banks and credit unions abide by, with the CFPB conducting proactive examinations to ensure legal compliance. The increased oversight is in response to the growing popularity and importance of digital payment apps, which are increasingly being used as de facto bank accounts by Americans. The CFPB’s rule has received support from the U.S. banking industry, which believes that tech firms entering financial services should be subject to more scrutiny. The rule will take effect 30 days after its publication in the Federal Register, but it is unclear whether the incoming Trump administration will decide to change or eliminate it. However, expanded oversight of tech companies may align with future CFPB leadership.

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