Public Citizen calls on federal regulator to install safeguards for consumers
A consumer advocacy group is applauding a proposal that would treat payment apps like Venmo and Cash App like banks, bringing new protections to consumers.
Public Citizen says a rule proposed by the Consumer Financial Protection Bureau (CFPB) would ensure both consumer privacy and the safety of funds held by digital cash management apps.
Emily Peterson-Cassin, digital policy advocate for Public Citizen said:
“Digital payments operated outside the traditional banking system can be beguilingly convenient and attractive to communities with histories of discrimination from banks. But consumers deserve sensible safeguards for when things go amiss. People shouldn’t be forced to depend on the kindness of Big Tech.”
The CFPB has indicated it is prepared to provide bank-like regulation to nonbank digital payment systems.
"Payment systems are critical infrastructure for our economy. These activities used to be conducted almost exclusively by supervised banks,” said 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."