The Financial Technology Association (FTA) has issued a statement criticizing the Consumer Financial Protection Bureau’s new rules addressing digital payments and transfers.
The CFPB revealed final rules today that are said to “strengthen oversight of large technology firms in consumer financial markets” that offer digital payments. Think Apple, think Google (Android), think PayPal etc.
The FTA claims that these final rules are not needed – a solution looking for a problem.
FTA CEO Penny Lee explains:
“It’s not clear what problem this rule is solving. Payment companies are well-regulated at the state and federal levels, and consumers are having positive experiences with them. In fact, Fintech apps rank among the most popular financial brands. According to the CFPB’s annual complaints database, out of 1.3 million complaints last year, only 1% were regarding money transfer and payment services—a category that experienced one of the lowest complaints growth year-over-year.”
Lee calls the payments rule “deeply flawed” and fails to define a market or any risks to consumers. She accuses the CFPB of misconstruing the issue and instituting a one-size-fits-all policy that will lead to fewer services, higher prices, and less competition.
“Instead of layering regulation simply for the sake of regulation, we should follow the lead of other major economies and work to integrate leading payment companies into the national payment infrastructure. We urge the Bureau to withdraw this rule.”
The FTA previously submitted a comment letter during the consultation process that directly addressed their concerns.
“The Bureau has failed to appropriately define the market or identify specific risks to consumers that existing regulation does not already mitigate,” states the FTA.
The final rule is something the incoming Trump administration may address.