The Financial Technology Association (FTA) has posted a comment letter criticizing the Consumer Financial Protection Bureau (CFPB) and a proposed rule on digital payments.
The FTA represents the interests of big Fintech firms like Stripe, Wise, Block, and others.
The CFPB announced the proposed rule last November. The proposal aims to define larger participants in digital consumer payment applications.
The FTA claims the proposal is overly broad and, at the same time, fails to identify consumer risk. In brief, a rule looking for a reason to exist. The FTA quotes the CFPB as explaining that an “entity might uncover compliance deficiencies indicating harm or risks of harm to consumers.” The FTA adds that there was insufficient cost-benefit analysis as part of the proposal.
Penny Lee, President and CEO of the Financial Technology Association, said that rather than analyzing specific markets, the CFPB is attempting to apply rules in a one-size-fits-all approach for digital payments.
“The CFPB should pause its rulemaking, recognize that existing laws govern digital payments markets, and reconsider this overly broad approach that could stifle innovation and limit competition and consumer choice.”
The FTA comment letter is available here.