CFPB Proposes Rule to Expand Oversight of Digital Consumer Payment Applications

Introduction

The Consumer Financial Protection Bureau (CFPB) has proposed a new rule that would expand its oversight to include parties involved in general-use digital consumer payment applications. This rule would apply to fund transfer or wallet providers if the funds are used by individuals for certain non-commercial purposes. Additionally, the CFPB's definition of 'funds' would encompass some digital asset transactions.

Background

The CFPB is responsible for protecting consumers in the financial marketplace. With the increasing popularity of digital consumer payment applications, the Bureau recognizes the need to ensure consumer protection in this evolving landscape.

Proposed Rule

Under the proposed rule, the CFPB would have the authority to regulate and supervise parties involved in general-use digital consumer payment applications. This includes fund transfer or wallet providers that facilitate transactions for non-commercial purposes.

Scope of Oversight

The CFPB's oversight would extend to certain digital asset transactions, as defined by the regulator. This means that digital consumer payment applications involving these transactions would fall under the Bureau's purview.

Takeaway

The CFPB's proposal aims to expand its oversight to better protect consumers using general-use digital consumer payment applications. By including fund transfer or wallet providers and certain digital asset transactions, the Bureau seeks to ensure that individuals are safeguarded when using these platforms. This proposed rule highlights the CFPB's commitment to adapting its regulatory framework to address emerging technologies and consumer needs.