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Attorney General Josh Stein Pushes for Stronger Oversight of Venmo, CashApp, and Other Digital Payment Services

For Immediate Release:
Wednesday, January 10, 2024

Contact: Nazneen Ahmed
919-716-0060

(RALEIGH) Attorney General Josh Stein supported proposed federal protections to make sure that digital payment and wallet services, including Venmo, CashApp, PayPal, and Zelle, are subject to the same protections as banks, credit unions, and other traditional financial institutions.

“More and more North Carolinians are conducting business on Venmo and other digital payment platforms, and they need to be able to trust that their money is going where they want to spend it,” said Attorney General Josh Stein. “These digital payment platforms need to be playing by the same rules so that people’s hard-earned money is protected.”

Customer funds in traditional banks and credit unions are secured by the Federal Deposit Insurance Corporation, but money held by these standalone person-to-person digital payment services are not. The lack of federal oversight exposes millions of digital payment platform users to scams and other risks. When payment problems do occur, these third-party digital payment platforms make it difficult or impossible to contact a customer service representative for help.

The Consumer Financial Protection Bureau (CFPB) has proposed a rule that would:

  • Include nonbank financial companies in CFPB supervisory examinations.
  • Hold these firms to the same level of accountability as banks and credit unions regarding data privacy, funds transfer, and other relevant consumer protection laws.
  • Consistently enforce federal consumer financial protection laws to promote fair competition.

Expanding the CFPB’s supervisory authority over these nonbank payment services would also reduce the risk of potential misuse of consumer data. Digital payment apps would be required to tell consumers about how they share and use their data and provide them with ways to opt out of information sharing.

Attorney General Stein is joined in sending this letter by the Attorneys General of California, Colorado, Connecticut, Delaware, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, Wisconsin, and the District of Columbia.

A copy of the letter is available here.

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