The companies “meta platforms” (Meta platforms Inc),”Apple”,”Alphabet”(Alphabet Inc) and other companies that provide digital wallets and payment applications, are likely to be subject to the supervision of the Consumer Financial Protection Bureau in the United States, under a recently proposed regulation, aimed at treating non-banking institutions like their traditional counterparts.
Companies that carry out more than 5 million transactions a year will be regulated like banks, credit unions and other financial institutions already under the supervision of the Consumer Financial Protection Bureau, the bureau said in a statement on Tuesday.
Auditors at the Consumer Financial Protection Bureau will be able to monitor payment applications for compliance with federal laws on money transfers, as well as unfair, deceptive or abusive actions, in the event that the passage of the rule is completed. The bureau can indeed intervene if non-banking institutions act illegally, but it cannot regularly supervise their operations under the current rules.
Rohit Chopra, Director of the Consumer Financial Protection Bureau, said in the statement: “the (proposed) rule will take strict measures against one of the means of regulatory circumvention by ensuring that large technology companies and other non-banking companies are subjected to appropriate oversight.
The use of digital payments for the purpose of holding and transferring funds has led to the boom of services such as PayPal’s Venmo application and block’s Cash app in recent years, as consumers use their phones and other electronic devices to conduct transactions.
