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New Reg Alert details CFPB rule on nonbanks and fintechs as ‘larger participants’
NAFCU sent member credit unions a Regulatory Alert Monday detailing the CFPB’s published notice of proposed rulemaking that would designate certain nonbanks offering “general-use digital consumer payment applications” as larger participants subject to the agency’s supervisory jurisdiction.
The association noted the proposed rule would target certain large, nonbank fintechs that provide a digital payment application to consumers with funds transfer or wallet functionality. The nonbank would be classified as a larger participant and subject to CFPB supervision if it has annual transaction revenue of at least five million and is not a small business.
This proposal would not directly impact credit unions and would not impose new substantive consumer protection requirements or alter the scope of the CFPB’s other authorities. The proposal would also reduce regulatory disparities the currently exist between large fintechs and credit unions.
The Regulatory Alert outlines two questions for credit unions to consider in their feedback. Credit unions can submit comments to NAFCU until Dec. 22; comments to the CFPB are due Jan. 8.