The CFPB is now proposing to supervise larger non-bank companies that offer services like digital wallets and payment apps. Driven largely by big tech and other large technology firms, digital payment apps and wallets continue to grow in popularity. But many of the companies are not subject to CFPB supervisory examinations. The proposed rule is reasonable and modest. It would ensure that non-banks adhere to the same rules as large banks, credit unions, and other financial institutions.
The proposed rule would be the sixth in a series of recent CFPB rulemakings. It is on a mission to define larger participants operating in markets for consumer financial products and services that play a substantial role in consumers’ everyday lives. The first five rules covered larger participants in consumer reporting, consumer debt collection, student loan servicing, international money transfers, and automobile financing.
Republicans’ antipathy to CFPB dates back to its launch
Meantime, Republicans continue their efforts to kill the CFPB. A number of notable Republican politicians are more interested in collecting campaign donations from, for example, payday lenders regulated by the CFPB, than in consumer protection.
Under Trump, the CFPB imposed a grand total of one fine, of all of $500, between late 2017 and 2020. During that period, the CFPB endured an exodus of staff in the supervision and enforcement division.
As the US election nears, the CFPB will increasingly be in the news. As it was set up by the Democrats a decade ago, there is natural antipathy towards the CFPB on the other side.
The Supreme Court is now investigating the funding of the CFPB. It will report next year, in election year, on a possible overhaul of CFPB financing.
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Separating the role of the CFPB from politics was a laudable aim when it was set up. That seems increasingly impossible in the current US political climate.