CFPB Seeks To Expand Regulatory Powers Over Consumer Payment Tech Entities

On November 7, 2023, the Consumer Financial Protection Bureau ("CFPB") issued a proposed rule that would grant it supervisory authority over major nonbank technology companies in the consumer digital payments space.

Although these nonbank entities already are subject to CFPB enforcement authority, this new designation would subject them to CFPB oversight in the same manner that the CFPB examines larger banks and nonbanks in specific markets like mortgage lending and credit reporting. 

The proposed rule would amend the definition of "larger participants" in consumer financial markets to include nonbank payment providers that process more than five million "consumer payment transactions" annually. Consumer payments involving personal or family purchases and peer-to-peer fund transfers would be covered, but transactions that involve the exchange of currencies or those transactions moving funds into, out of, or between cryptocurrencies would be excluded. Also