The CFPB Tuesday issued a NAFCU-supported proposed rulemaking to provide new federal oversight of fintech companies and other providers of digital wallets and payment apps. The proposal would subject large technology companies to the same supervisory examination process as credit unions and banks.
The CFPB notes that the proposed rule would require nonbank entities that process more than 5 million transactions and do not meet the Small Business Administration’s definition of a small business to “play by the same rules as banks and credit unions.” In addition, the CFPB would be examining for compliance with applicable provisions of federal consumer financial laws, including the Electronic Fund Transfer Act and its implementing Regulation E, as well as the privacy provisions of the Gramm-Leach-Bliley Act.
“NAFCU has long supported a level playing field between credit unions and fintechs. Today’s proposed rule will help ensure that large fintechs and nonbanks offering digital consumer payment applications are held to similar standards as credit unions and other institutions examined by the CFPB,” said NAFCU Senior Vice President of Government Affairs Greg Mesack. “Nonbank payment services, such as P2P apps, play a significant role in the market for consumer payments. To better protect consumers and ensure competitive fairness, the CFPB must seek to reduce supervisory gaps between nonbanks and credit unions offering digital payment products or services.”
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