CFPB Proposes Regulatory Crackdown on Tech Giants Handling Consumer Transactions, Including Apple, Google, PayPal, and Venmo

Rule Proposal Could Cover 17 Firms Accounting for 88% Market Share; New Regulation Plan Triggers Tensions Between Tech and Banking Industries

The Consumer Financial Protection Bureau (CFPB) has proposed a regulatory crackdown on tech companies, including Apple, Google, PayPal, and Venmo that handle consumer transactions. This proposal could encompass 17 firms accounting for 88% of the market share.
The move is part of a larger effort to supervised large nonbank payments companies, with an aim to ensure they comply with laws relating to unfair or deceptive practices and data privacy protections. This would mean digital wallets and payment apps would be regulated like traditional banks.
The proposal signifies a major shift for tech giants that have largely operated without significant oversight from federal banking regulations. These companies process payments equivalent to $1.7 trillion per year.
The proposed regulation is expected to trigger a battle between the lobbying arms of the tech and banking industries, both of which have been at odds for years. The banking industry has long called for tech firms that engage in financial activities to be subjected to the same level of scrutiny.
The proposal is still under review and the public is welcome to comment until early 2024. After this period, CFPB may submit a finalized rule.