A trade group representing tech companies has started fighting back against a proposal from the Consumer Financial Protection Bureau that would give the regulator power over the companies and anyone else involved in digital wallets and payments apps.
The Computer & Communications Industry Association filed comments with the CFPB over its proposed rule earlier this week, saying that the proposal will stifle innovation and keep some players out of the market. The CCIA counts tech giants like Amazon, Apple, Google, and Facebook among its members.
Why This Matters: The rule, as it is currently written, would apply to the 17 companies currently processing more than 5 million transactions per year. Those 17 companies would be subject to supervisory examinations by the Bureau to ensure fair competition and consumer protection.
- The proposal is not specific enough, according to the CCIA. It does not identify a specific risk, but instead says that new risks are possible without going into detail about what they are.
- “… it is paramount for the CFPB to carefully determine if there is a market failure or a risk for consumers that requires this additional regulation, as there is a significant risk that the CFPB might disincentivize investment and innovation in the regulated sector and hurt American consumers,” the CCIA said in its comment. “Even if there are some instances where banks and nonbank entities compete, the reality of the market shows that there are more instances where their synergies help consumers, providing complementary services.”
- A separate comment, filed by the Financial Technology Association, which counts companies like PayPal among its members, made similar statements.
- The battle lines are being drawn between some of the largest companies in the world and the CFPB.
