A trio of Republicans from the House Financial Services Committee sent a letter to Rohit Copra, the director of the Consumer Financial Protection Bureau, asking for the Bureau to revisit a number of aspects of its proposed rule that would give it the power to regulate a handful of tech companies what manage and facilitate millions of transactions per year. There isn’t sufficient justification for the rule, and it creates uncertainty whether it would apply to third-party service providers or not, according to the lawmakers.
The Background: Back in November, the CFPB issued the proposed rule, which would subject any company that processes more than 5 million transaction per year to the CFPB’s supervisory authority. At the time the proposed rule was released, 17 companies met that threshold, including Apple and Google.
- The comment period for the proposed rule closed last month. Tech companies came out against it, as did Rep. Patrick McHenry [R-N.C.], the chair of the House Financial Services Committee, saying the rule, if enacted as proposed, would stifle innovation.
The Letter: Rep. McHenry, along with Rep. French Hill [R-Ind.] and Rep. Mike Flood [R-Neb.], asked the CFPB to reopen and extend the comment period and reconsider the rule as currently proposed.
- As written, the rule is unclear whether it applies to third-party service providers or not, sowing confusion and doubt as to who would be subject to its provisions, the lawmakers wrote.
The Last Word: “In fact, the proposed rule fails to provide any evidence of non-compliance with Federal consumer financial laws or explain how it would be addressed by this new regulation. Disregarding such considerations allows the Bureau to wield a concerning degree of power when issuing a larger participant rule.”
