Democratic AGs Support CFPB Proposal to Oversee Digital Wallets and Payment Apps

  • A coalition of 19 Democratic AGs wrote a comment letter in support of a proposed CFPB rule that would expand federal regulatory oversight over digital consumer payment and wallet services.
  • In the letter, the AGs praise the proposed rule, which would subject digital payment applications like Cash App and Venmo to CFPB oversight, as already applies to traditional banks and providers of consumer financial products. The AGs also assert that the rule will allow states to obtain more information and tools to support state consumer protection enforcement and outreach efforts.
  • AG support for increased regulation comes as no surprise, given the trend over the past few years of AG scrutiny of nontraditional financial services and products, such as peer-to-peer payment platforms and buy-now-pay-later services. This trend was highlighted in a recent article by Cozen O’Connor attorneys Siran Faulders and Keturah Taylor, along with advice to digital payment platforms on how to avoid attracting state and federal regulatory scrutiny.