What digital consumer payment companies need to know about CFPB supervision

10 minute read

Following years of market research into the fintech and payments industries, in November 2023, the Consumer Financial Protection Bureau (CFPB) announced a proposed “larger participant” rulemaking to define the market for general-use digital consumer payment applications.[1] The proposed rule would subject companies that provide “payment apps,” “person-to-person apps,” “P2P apps,” and similar applications to CFPB supervision and examination, provided that the companies meet certain size thresholds.

The CFPB is the primary supervisor of consumer financial products and services offered by nonbank entities. The prospect of a CFPB examination can be daunting: voluminous document requests, on-site visits, and the potential for remediation and penalties if the examiners identify significant deficiencies. Providers of digital wallets and other fund transfer services in the healthcare industry should review the proposed rule carefully to determine the extent to which their products or services may fall within the covered market. With the comment period for the proposed rulemaking having closed earlier this year, providers of covered services should prepare for a future of CFPB supervision in the not-too-distant future.

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