CFPB targets US fintech firms with proposals for increased regulatory scope

The Consumer Financial Protection Bureau (CFPB) aims to subject large tech firms and neobanks to supervisory examinations similar to traditional banks.
Proposed regulations target nonbank companies dealing with digital wallets, retail payment apps, or processing over 5 million transactions annually.
The regulations would apply to 17 companies, including PayPal, Apple, and Google, constituting 88% of the market share, processing $13 billion in transactions per year.
If approved, these companies would need to comply with the Consumer Financial Protection Act, safeguarding against financial abuses, privacy infringements, and consumer rights impediments.
CFPB Director Rohit Chopra emphasizes the critical role of payment systems in the economy and aims to prevent regulatory arbitrage by ensuring oversight of large tech and nonbank payment companies.
The move is part of the CFPB’s broader initiative to level the regulatory playing field between traditional banks and nonbanks, building on previous actions targeting nonbank lenders, fintechs, buy-now-pay-later (BNPL) firms, and proposing a public registry for nonbank terms and conditions.