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The CFPB has issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.”  Comments on the proposal are due by January 8, 2024 or by the date that is 30 days after the proposal’s publication in the Federal Register, whichever is later.

The proposal is based on the CFPB’s authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services.”  It would cover providers of consumer financial products and services that are commonly referred to as “digital wallets,” “payment apps,” “funds transfer apps,” and “person-to-person or P2P payment apps.”

Continue Reading  CFPB Issues Proposal to Supervise Nonbank Providers of Digital Wallets and Payment Apps

A group of five Democratic Senators have sent a letter to the Federal Reserve, OCC, FDIC, and NCUA asking them to take several steps to protect consumers from scams when using Zelle to transfer money.

The Senators ask the four agencies “to closely review and examine the customer reimbursement and anti-money laundering (AML) practices of depository institutions that participate in the Zelle network.” They also ask the Federal Reserve and OCC “to examine Early Warning Services, Inc. (EWS), which operates the Zelle network, on an ongoing basis and for the four agencies “to coordinate their supervisory approach with the Consumer Financial Protection Bureau.”  The Senators note that the agencies have authority to supervise the banks that own and operate Zelle and the participating depository institutions for compliance “with key consumer protection and AML laws, including the Electronic Fund Transfer Act (EFTA) and the Bank Secrecy Act (BSA).”

Continue Reading  Democratic Senators Send Letter to Federal Banking Agencies Raising Concerns About Fraudulent Transactions