"As tech companies expand into banking and payments, the CFPB is sharpening its focus on those that sidestep the safeguards that local banks and credit unions have long adhered to," CFPB Director Rohit Chopra said in a statement. Deposit insurance has been a popular topic across the finance industry this year with the collapse of three regional banks sparking discussion and questions about bank deposits that are insured by the federal government. Without deposit insurance, if money is no longer accessible because of something like a bankruptcy filing, that money could be gone forever with little to no chance for the user to be reimbursed, the CFPB said. Given the massive amounts of money passing through the apps, the CFPB said the lack of federal regulation and oversight on the apps comparable to what banks have to face is concerning. That's expected to nearly double to $1.6 trillion by 2027. The apps saw a collective $893 billion in transactions last year, per the CFPB's report.
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