The Consumer Financial Protection Bureau (CFPB) has proposed a rule on Tuesday that could extend its regulatory reach to nonbank digital wallet providers, including Google (NASDAQ:), Apple (NASDAQ:), PayPal (NASDAQ:), and Block. The new rule would affect companies that process over five million financial transactions annually, which currently includes approximately 17 firms.
The CFPB’s director, Rohit Chopra, has been advocating for increased regulatory scrutiny of large technology companies due to potential concerns related to “surveillance and censorship.” He views these payment systems as a crucial component of the economy.
In September, the CFPB released a report highlighting how Apple and Google utilize their dominant position in the mobile phone market to promote their own digital wallets. Consumers transacted $893 billion through these services in 2020. While the adoption of digital payments in the U.S. has been slower compared to other countries, the pandemic has significantly accelerated its usage.
Currently, the CFPB’s jurisdiction over electronic fund transfers gives it enforcement powers over digital payment companies. However, the proposed rule would bolster its supervisory oversight, providing a more detailed insight into the operations of major market participants.
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