CFPB’s Digital Payments Plan Sparks ‘Confusion,’ Fintechs Say

Fintech trade groups said the Consumer Financial Protection Bureau needs to provide more clarity about who would be covered by the agency’s proposal to subject digital payments companies to direct supervision.

The CFPB’s proposal for agency examiners to review operations at the 17 largest online payments and digital wallet operators contains contradictions that would result in some companies being subject to agency exams, while excluding other businesses with nearly identical services, industry trade groups said in a Thursday letter. The groups asked for an additional 30 days to comment on the proposal.

“The proposal fails to make clear which product markets it includes and excludes, leaving substantial confusion about the identity of the 17 companies the rule says are covered, nor does it provide a sufficient cost-benefit analysis of the potential impacts of such a rule on these distinct product markets,” the letter said.

The comments mark the latest public response from technology companies leery of being roped into the CFPB’s supervision, and highlight the hurdles the consumer watchdog faces as it looks to safeguard the rule from legal challenges.

The Electronic Transactions Association, the Financial Technology Association, the American Fintech Council, the Chamber of Progress, the Computer & Communications Industry Association, the Information Technology Industry Council, NetChoice, and TechNet all signed on to the letter.

A CFPB spokesman said that the agency was reviewing the extension request.

Tech Giants Targeted

The CFPB issued its “larger participant” proposal for companies offering online payments and digital wallet services in early November, setting a Jan. 8 comment deadline.

The proposal doesn’t name the 17 businesses the CFPB believes would be subject to direct supervision by its examination teams, but many industry watchers expect Apple Inc.‘s Apple Pay, Alphabet Inc.‘s Google Pay, and payment services provided by Meta Platforms Inc. and other tech giants will likely be included in the final list.

The proposal could also cover virtual currency businesses that provide retail payments services.

The fintech industry associations said the comment period’s overlap with the holiday season made it harder than normal to provide adequate feedback to the CFPB.

Many of those trade groups are also working on comments for a CFPB proposal to allow consumers to more easily share their financial data. That proposal has a Dec. 29 deadline.