Director Chopra says payment apps are ‘critical infrastructure’ to U.S. economy
The Consumer Financial Protection Bureau proposed a new rule Tuesday that would require big tech companies who offer payment services — think Apple Pay or PayPal — to submit to supervisory examinations typically reserved for large banks.
“Today’s rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight,” he added.The rule proposal follows a more than two-year study of big-tech payment offerings, following a request for information that targeted Google parent Alphabet GOOG, +0.73% , Apple AAPL, +1.09%, Facebook parent Meta META, +1.10%, Amazon AMZN, +2.16% Block SQ, +3.60% and Paypal. PYPL, +0.
The proposed rule would subject large nonbank payment companies that handle more than 5 million transactions per year to in-house supervision by regulators who will carefully scrutinize business practices to make sure these companies follow federal consumer protection and privacy laws. Chopra has previously raised concerns about how the use of payment apps may erode privacy, saying in a speech last month that he was concerned about the amount of data collected by big-tech purveyors of payment products and the common practice of selling that data to third parties.The banking industry has also been pushing for the CFPB to increase its oversight of Big Tech payment products, arguing that it would level the playing field for banks and credit unions.
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