The U.S. Consumer Financial Protection Bureau (“CFPB”) recently introduced a new proposed rule change that will expand its regulatory oversight to “‘general-use digital consumer payment apps.’” (Jessie Chang, ABA). The Consumer Financial Protection Act allows the CFPB to supervise nonbank entities in the mortgage, payday loan, and private student loan sectors, as well as service providers to banks and credit unions, but the CFPB can also oversee companies that pose consumer risks or are “larger participants in other markets.” (Consumer Financial Protection Bureau). While the CFPB has used its power to regulate “larger participants” in markets involved with consumer financial products and services before, this proposed rule will expand its oversight to a brand-new height by including more non-traditional banking companies. (A&O Shearman). CFPB Director Rohit Chopra stated the proposed “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.” (Consumer Financial Protection Bureau). This article examines the need for and the positive effects of this proposed rule, as well as the potential dangers.

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