Big Tech companies and others that together process more than 13 billion financial transactions annually through digital wallets and payment apps will be subject to government supervision, reports Reuters.
The new rule from the U.S. Consumer Financial Protection Bureau was finalized on Thursday. It will bring a burgeoning consumer service under the same scrutiny faced by banks while helping protect the privacy of vast amounts of consumer data and preventing fraud and the illegal closure of their accounts, the agency said.
The rule was first proposed on November 7, 2023, when the U.S. Consumer Financial Protection Bureau (CFPB) proposed to regulate tech giants’ digital payments and smartphone wallet services, saying they rival traditional payment methods in scale and scope but lack consumer safeguards. It opening companies such as Apple, Alphabet, PayPal, and others to bank-like supervision, with CFPB examiners inspecting their privacy protections, executives’ conduct and compliance with laws barring unfair and deceptive practices.
The CFPB an independent agency of the U.S. government responsible for consumer protection in the financial sector. CFPB’s jurisdiction includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors, for-profit colleges, and other financial companies operating in the United States.
