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The
warnings from the Computer & Communications Industry Association
(CCIA) - whose members also include Amazon, Facebook parent Meta
and X, formerly known as Twitter - responded to a proposal in
November by the U.S. Consumer Financial Protection Bureau (CFPB),
which said tech giants' smartphone payments and wallets services
rivaled traditional payment methods but lacked the same consumer
safeguards.
The CFPB proposal, which has yet to be finalized, would subject
such companies to the same kind of supervision currently imposed
on banks, with agency examiners inspecting compliance with laws
on unfair or deceptive practices and privacy protections, as
well as scrutinizing executives' conduct.
Officials expect the proposal, as currently written, would cover
17 companies responsible for 13 billion payments annually.
Some bank industry representatives have reacted warmly to the
proposal, saying companies that provide bank-like services
should be regulated and directly supervised like banks.
However, Krisztian Katona, CCIA's head of regulatory policy,
said in a statement reviewed by Reuters that the proposal risked
doing more harm than good "as broad, overly burdensome or
heavy-handed digital regulation could significantly hinder new
startups in this industry."
In a comment letter to be submitted to the CFPB also reviewed by
Reuters, CCIA said the CFPB's proposal had failed to identify
the specific risks to consumers it sought to address and
improperly viewed non-bank digital providers and banks as direct
competitors.
"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," the letter said.
In a separate comment letter also released on Monday, the
Financial Technology Association, whose members include PayPal,
which owns the service Venmo, and Block Inc, which operates Cash
App, shared similar concerns.
It said existing regulations were sufficient and called on the
CFPB to suspend the rulemaking process.
(Reporting by Douglas Gillison; Editing by Chris Reese and
Sonali Paul)
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