BPI and TCH Respond to CFPB Proposal to Define Larger Participants for Consumer Payment Apps

To whom it may concern:

The Clearing House Association, L.L.C. (“The Clearing House” or “TCH”)[1] and the Bank Policy Institute (“BPI” and, collectively with TCH, “Associations”)[2] appreciate the opportunity to provide comments in response to the Consumer Financial Protection Bureau’s (“CFPB” or “Bureau”) proposed rulemaking on “Defining Larger Participants of a Market for General-Use Consumer Payment Applications” (the “NPR”).[3] In the NPR, the CFPB defines a market for general-use consumer payment applications and proposes to exert its statutory authority to supervise the larger non-bank participants in that market.[4] The Associations commend the Bureau on the issuance of the proposed rule and are broadly supportive of it. We note, however, that the following issues warrant additional consideration by the Bureau:

  • The Bureau should clarify whether the extension of credit by buy now, pay later (“BNPL”) applications are subject to exclusion from the definition of consumer payment transaction(s) under proposed section 1090.109(a)(2)(D), should provide illustrative examples of those consumer credit products that are covered by the rule, and if not intending to cover the extension of credit through BNPL applications in this rulemaking, the Bureau should do so in a subsequent rulemaking; and
  • The Bureau should limit the scope of the term “funds” for purposes of this rulemaking to
    fiat currency and legal tender.

To read the full comment letter, please click here, or click on the download button below.

[1] The Clearing House Association, L.L.C., the country’s oldest banking trade association, is a nonpartisan organization that provides informed advocacy and thought leadership on critical payments-related issues. Its sister company, The Clearing House Payments Company L.L.C., owns and operates core payments system infrastructure in the U.S., clearing and settling more than $2 trillion each day. See The Clearing House’s web page at www.theclearinghouse.org.

[2] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s bank-originated small business loans, and are an engine for financial innovation and economic growth.

[3] Consumer Financial Protection Bureau, Defining Larger Participants of a Market for General-Use Consumer Payment Applications, 88 Fed. Reg. 80197, (Nov. 17, 2023).

[4] Id. at 80197. The rulemaking is based on the CFPB’s authority over “larger participant[s] of a market for other consumer financial products or services” as the CFPB defines by rule. 12 U.S.C. § 5514(a)(1)(b).