The Consumer Financial Protection Bureau wants to supervise large nonbanks that offer digital wallets and payment applications.
Unveiled Nov. 7, the proposed rule would cover companies handling more than 5 million transactions per year, including payment processors such as Amazon, Meta, Google, Square and PayPal.
According to the CFPB, nonbank payment processors are not subjected to the same regulatory scrutiny and oversight as banks. Though the CFPB has enforcement authority over fintech payments processors, agency examiners have not been closely scrutinizing their activities.
“Big Tech and other companies operating in consumer finance markets blur the traditional lines that have separated banking and payments from commercial activities,” the CFPB stated. “The CFPB has found that this blurring can put consumers at risk, especially when the same traditional banking safeguards, like deposit insurance, may not apply.”