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Consumer Financial Agency to Regulate Online Payment Services
The Consumer Financial Protection Bureau (CFPB) will now oversee non-bank companies that provide financial services like online payments and digital wallets.
This rule applies to payment apps from tech giants like Apple, Google, and Amazon, as well as PayPal, Block, Venmo, and Zelle. These services collectively handle billions of consumer transactions annually.
The move aims to ensure that these companies adhere to the same regulations as traditional banks and credit unions. It will also allow the CFPB to monitor newer players in the financial sector that have previously avoided oversight.
Americans are increasingly using these apps as bank accounts, making transactions and holding balances within the apps instead of traditional bank accounts. The CFPB says this shift has made these apps essential financial tools.
However, the rule exempts apps that operate exclusively for a single retailer, such as Starbucks. The regulation will take effect 30 days after its publication in the Federal Register.