The Consumer Financial Protection Bureau (CFPB) is overstepping its bounds when it comes to regulating digital payments firms — especially larger players — critics charged at a Wednesday (March 13) House hearing.
At the House of Representatives Committee on Financial Services Subcommittee on Digital Assets, Financial Technology, and Innovation hearing, titled “Bureaucratic Overreach or Consumer Protection? Examining the CFPB’s Latest Action to Restrict Competition in Payments,” the focus was on the rule proposed by the CFPB that would govern digital payment apps and wallets.
In opening remarks, Rep. French Hill (R-Ark.), chairman of the committee, stated that the comment period for the regulatory agency’s proposed rulemaking is “egregiously short.” He said the CFPB’s cost-benefit analysis was and remains “deeply flawed.”
He said the proposal intimates that companies that let individuals send money to one another, and companies that keep credit card information on file are “somehow in the exact same market.” And, he added, many companies are “confused about how the rule will be implemented or if they are even covered by it.”
In broad terms, and as the CFPB stated last November, the rule would mean that nonbank financial companies — specifically those larger companies handling more than 5 million transactions per year — would “adhere” to the same rules as large banks, credit unions, and other financial institutions already supervised by the CFPB.
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