CFPB Expands Oversight: Finalizes New Rule Targeting Big Players In Digital Payments

On November 21, the Consumer Financial Protection Bureau (CFPB) finalized a rule to supervise nonbank companies that offer digital wallets and payment apps. The rule allows the CFPB to supervise and examine nonbank companies in the market for "general-use digital consumer payment applications" that handle more than 50 million transactions per year. The CFPB already has enforcement authority over these companies, but this rule now allows the CFPB to conduct examinations.

The CFPB has the authority to examine certain firms, including banks, credit unions, payday lenders, and nonbank mortgage companies. But it can also extend supervisory authority to larger nonbank entities. According to CFPB Director Rohit Chopra, digital payments have gone from "novelty to necessity" as consumers use payment apps for daily transactions at rates that rival or exceed the use of cash.