CFPB nonbank supervision: A power grab or much needed rule?
A House subcommittee held a hearing on possible regulation of payment aps
Are nonbank payment companies financial institutions that should be regulated by the Consumer Financial Protection Bureau, or are they technology companies that the agency should not attempt to regulate?
A subcommittee of the House Financial Services Committee struggled with that issue on Wednesday, and as the hearing ended, the panel and witnesses remained divided over the answer to that question.
The hearing was focused on a proposed rule, released by the CFPB last November, that would allow the agency to supervise large companies in the “general-use digital consumer payment application” industry. The CFPB proposed regulating nonbank companies with more than five million transactions each year.
The hearing was held by the Financial Services Committee’s Digital Assets, Financial Technology and Inclusion Subcommittee. Its chairman, Rep. French Hill, R-Ark., is opposed to this type of CFPB regulation. He said that CFPB Director Rohit Chopra “has decided, on a whim and, in my view, without justification, that technology companies pose a threat to consumers, and this rule should be viewed as a thinly veiled workaround to get CFPB supervision teams into these tech companies.”
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