CFPB Seeks Input on Digital Payment Privacy and Consumer Protections

The regulation of digital assets, including cryptocurrencies and video game payment mechanisms, has long been a gray area. Regulatory agencies have struggled to define the extent of their jurisdiction over these rapidly evolving markets. On January 10, 2025, the CFPB announced a proposed rule aiming to bring digital currencies, stablecoins, and other emerging payment mechanisms under the umbrella of existing consumer protection laws.

Key Takeaways

1. The Consumer Financial Protection Bureau (“CFPB”) has proposed a significant rule that could extend consumer protection requirements to digital asset platforms, including stablecoins and video game payments.
2. Digital asset platforms may soon need to implement robust error resolution, dispute resolution, and disclosure programs.
3. Public comments on the proposed interpretive rule are due by March 31, 2025, and comments on the Request for Information regarding consumer payment data privacy are due by April 11, 2025.

The CFPB’s Proposal

The CFPB’s proposed interpretive rule clarifies how the Electronic Fund Transfer Act (“EFTA”) and Regulation E apply to digital payments, including:

• Digital currencies and stablecoins
• Proprietary video game currencies
• Person-to-person (“P2P”) payment apps

Under this rule, digital asset platforms would be required to offer consumers:

• Comprehensive error resolution procedures
• Dispute resolution mechanisms
• Clear and accurate disclosures of fees, risks, and terms

This proposed rule is more stringent than New York’s Department of Financial Services (“NYDFS”) requirements under Section 200.19 of its Virtual Assets Regulations, signaling a shift toward increased federal oversight.

Privacy Concerns and Consumer Data

The CFPB also issued a Request for Information seeking public input on:

• How digital payment platforms collect, use, and share consumer data
• The effectiveness of current privacy frameworks under the Gramm-Leach-Bliley Act (“GLBA”)
• Potential updates to strengthen privacy protections and limit harmful financial surveillance

This inquiry reflects growing concerns about the expansive data collection practices of major technology and fintech firms, which often exceed what is necessary for completing transactions.

Implications for the Industry

The CFPB’s proposals are part of a broader effort to ensure consumer protections keep pace with innovations in the payments ecosystem. These developments have significant implications for digital asset platforms, gaming companies, and fintech providers, as they may soon face:

• Heightened regulatory scrutiny
• Increased operational and compliance costs
• Greater transparency requirements

Public Comment Period

Stakeholders have an opportunity to provide input:

• Comments on the proposed interpretive rule: Due by March 31, 2025
• Comments on the Request for Information: Due by April 11, 2025

Next Steps

Companies operating in the digital asset space should begin assessing their compliance frameworks and preparing for potential regulatory changes. Stakeholders are encouraged to submit comments to the CFPB to ensure their perspectives are considered in the final rulemaking process.

For more information or assistance with submitting comments, please contact AGG Emerging Technologies co-chair Allison Raley.

Author: Allison Raley
Email: allison.raley@agg.com