June 22, 2023

Volume XIII, Number 173

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CFPB Intends to Supervise and Examine Consumer Payments Companies

The Consumer Financial Protection Bureau (CFPB) recently released its Spring 2023 rulemaking agenda. The agenda includes a new rulemaking that did not appear on the Fall 2022 agenda—a rule to supervise, pursuant to Section 1024 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA), nonbank larger participants in the consumer payments market. The agenda gives a July 2023 estimate for issuance of a notice of proposed rulemaking.

The CFPB has long expressed concern about big tech’s entry into financial services, particularly in connection with payments, and these companies’ ability to collect and monetize consumer data. For example, the CFPB used its market monitoring power to issue orders seeking information about payments products and services and the use of consumer payments data to six large technology platforms. The CFPB has not issued a report on its findings from these monitoring orders.

The notice of proposed rulemaking will provide details on the new regulation. Typically, such rulemakings define the larger participant market using revenue or similar metrics. If the “larger participant rule” is adopted for consumer payments, covered participants will be subject to CFPB supervision and other requirements, including examinations and enforcement actions. CFPB examinations, while similar to state examinations, would stress consumer protection and the overall strength of the compliance management system to a greater degree.

Many nonbank payment companies are subject to state regulation and/or act as program managers to state and federal banks, thus they already are subject to regulatory oversight. Additionally, defining a large market for supervision would not change the laws, regulations, and rules that applied to that market. However, this new rule, if finalized, would bring the largest players in the consumer payments industry under the Bureau’s supervisory purview, affording the CFPB the ability to impact the industry’s consumer compliance approaches.

©2023 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XIII, Number 173
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About this Author

Benjamin Saul Financial Compliance Attorney Greenberg Traurig Law Firm DC
Shareholder

Benjamin Saul is a shareholder in the firm’s Financial Regulatory and Compliance Practice. For two decades, Ben has handled high-stakes regulatory, enforcement, and litigation matters for corporate and individual clients in the consumer finance, specialty finance, fintech, and banking sectors. 

Ben has helped clients navigate dozens of contentious supervisory, enforcement, and litigation matters involving the Consumer Financial Protection Bureau (CFPB), and has been a leader in the private bar on CFPB matters since the Bureau’s inception in 2011...

202-331-3123
Tarrian L. Ellis Consumer Finance Attorney Greenberg Traurig
Associate

Tarrian L. Ellis focuses his practice on federal and state regulation of consumer financial products and services, including matters related to fair lending, residential mortgage lending and servicing, student loan servicing, electronic lending, and digital payments. He also advises clients on matters involving the Consumer Financial Protection Bureau (CFPB) and other federal and state regulatory authorities with oversight of consumer financial payments, products, and services.

Prior to joining Greenberg Traurig, he served as a regulatory...

202-533-2351