Press Releases

McHenry, Hill, Flood Urge CFPB to Revisit Digital Consumer Payment Proposed Rule

Washington, January 30, 2024 -

The Chairman of the House Financial Services Committee, Patrick McHenry (NC-10), Chairman of the Digital Assets, Financial Technology and Inclusion Subcommittee, Rep. French Hill (AR-02), and Rep. Mike Flood (NE-01) sent a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra regarding the Bureau’s proposed rule “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.” The lawmakers are urging the CFPB to reopen and extend the public comment period—as well as reconsider finalizing the rule as currently proposed—given its insufficient justification, unclear guidance regarding third-party service providers, unknown effects on the digital asset ecosystem, and an inadequate comment period.


Read the lawmakers’ full letter to Director Chopra here.

Read key excerpts from the lawmakers’ letter below: 


“Dear Director Chopra:


“We write in regard to the Consumer Financial Protection Bureau's (CFPB) November 2023 proposed rule to define a market for general-use digital consumer payment applications, and strongly urge the CFPB to reopen the comment period and reconsider finalizing the rule as proposed. 


No Sufficient Justification is Made for the Proposed Rule


“As written, the proposed rule does not adequately justify the need to substantially expand the Bureau’s regulatory scope into the payments industry. Rather, the Bureau relies on its regulatory prerogative under the Dodd-Frank Wall Street Reform and Consumer Protection Act as the basis for implementing a burdensome and overreaching supervisory authority. The proposed rule fails to analyze the costs, the impact on competition, and inevitably how the proposal hurts consumers.


Third Party Service Providers are Left in Regulatory Limbo


“In addition to expanding its supervisory authority over covered entities, the CFPB creates more market uncertainty by overseeing third-party service providers. As written, it is unclear whether the proposed rule covers third party service providers and, if so, how it would extend to these providers. By failing to articulate the extent to which the Bureau intends to oversee services providers, the proposed rule creates more uncertainty.


The Proposed Rule’s Impact on Digital Assets Payments is Unclear


“The proposed rule asserts that the Dodd-Frank’s definition of ‘funds’ includes ‘digital assets that have monetary value and are readily useable for financial purposes, including as a medium of exchange.’ The Bureau’s approach creates more regulatory uncertainty that could undermine the digital asset industry’s functionality with respect to digital asset transactions.


A Longer Comment Period is Warranted


“Given the proposed rule’s wide sweeping implications and existing ambiguities, the comment period should be reopened for an additional 60 days. This would ensure that the Bureau receives substantive input from a wide array of stakeholders before moving forward with this rule. As it currently stands, this rule would introduce more regulatory uncertainty into the payment industry, particularly with respect to third-party service providers and digital asset companies. It's imperative that the Bureau avoids advancing the rule in its current form.”



Print version of this document