The Consumer Financial Protection Bureau (CFPB) wants to regulate tech giants such as Apple and Google that offer digital payment apps and wallets.
The CFPB says that the likes of Apple Pay and PayPal have gained significant market share in recent years as Big Tech blurs the traditional lines that have separated banking and payments from commercial activities.
Yet these operators in the payments sphere do not receive the same regulatory scrutiny and oversight as banks and credit unions.
The bureau has now published a proposed rule that would see non-bank financial companies that handle more than five million transactions per year face the same rules as large banks and credit unions.
The rule would cover around 17 companies, most notably Google, Apple, PayPal and CashApp operator Block. These firms would have to adhere to applicable funds transfer, privacy, and other consumer protection laws.
"Payment systems are critical infrastructure for our economy. These activities used to be conducted almost exclusively by supervised banks," says CFPB Director Rohit Chopra. "Today's rule would crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight."
In 2021, the CFPB ordered Amazon, Apple, Facebook, and Google to hand over information on their payment system plans so that it can see how they gather and use customer data.