It's not about Apple.
It's Apple, Google and Amazon, PayPal, Block, Venmo and Zelle.[1] Everybody with over 50,000,000 transactions annually gets CFPB oversight. Actual rule: [2]
This doesn't really do much. It creates no consumer rights. It does give CFPB examiners the power to examine records and interview people. It means that numbers such as how many PayPal customers have complaints will be looked at. Bank examiners look at error rates, fraud losses, unresolved complaints, and such. The effect will probably be that some of the big players with weak customer service will have to get their act together.
> Everybody with over 50,000,000 transactions annually gets CFPB oversight.
This is such a simple, straightforward rule. No weird gotchas, exceptions, or whatever. Just the most basic test you can think of for "are you acting as a financial institution in the most obvious day-to-day sense of the term?" and a reasonably sane (I think?) threshold.
It's also so bloody easy to prepare for. Are you handling 1M transactions anually? No worries, keep doing your thing. Are you handling 20M transactions annually? You probably want to start planning. 40M p.a.? You want to be preempt the moment when you get regulated.
Simple rules are an antidote to corruption and inefficiency, but only if they are paired with transparency and a judicial system willing to enforce the spirit of the laws, lest they be easily gameable.
Its regulated as an "electronic money institution" in the UK—i.e. its regulated but it does not have the rock solid guarantees that make banks a safe place to keep your savings.
but could paypal legally use the money you deposited inside your paypal account for some other purpose (of their choosing), provided they can front the money back if you ask for it?
In the UK no. This is reserved for Banks only. They can make money on the interest which I presume is why EBay UK has moved to a no-fees model but they now keep your money in a balance rather than paying out immediately.
I am thinking that would also include Stripe? Or is Stripe not consumer facing? Not that Apple is forced to open up NFC worldwide. I am wondering what would happen next? Surely Apple has incentive to own NFC transaction or something like Apple Cash.
Stripe is considered to be acting for a "sponsor bank", the one that handles the merchant's account. Stripe itself does not hold customer or merchant money.
> ...The effect will probably be that some of the big players with weak customer service will have to get their act together...
Agreed that maybe *explicitly* consumer rights are not added on so to speak...but if you are correct about the effect being improved customer service, i would say that would be a big "consumer rights" win! I'll take that over keeping the status quo of crap customer service.
> role is normally limited to banks and financial services companies.
Was anyone expecting a system that handles 6 trillion dollars a year to not fall under financial regulatory purview?
Which I realise is not the actual thrust of the rule change (obviously they were already under some regs already), but it's just such an odd intro.
Apple withdrawing Pay Later when it became clear they'd need to comply with lending regs is quite telling too. Presumably they were attempting to sneak in the back door and claim "it's tech not banking" and got told they're not above the law when the Truth in Lending Act was confirmed to cover the system.
As someone who runs an actual bank, the headlines around this story are super misleading. In no meaningful way will be Apple be treated like a bank in the way that we generally expect banks to be treated.
A friend of mine , 15 years ago (ios 3), already predicted that the only reason why apple would stash that amount of cash was if they planned on turning into a bank.
I said the same thing, and I'm going to do one more prediction: the banking business will become more and more profitable with very low risk to the point it will take more and more space in Apple's culture.
Also, regulations and the hiring market mean they will have to hire more and more profiles than you typically find in finance. With Jobs dead and an aging Cook that can't willpower himself into everything anymore, nothing will cancel this effect.
Eventually, this will lower Apple taste for innovation and the product quality will go down until they become another average player cashing in on the inertia of its past success.
They will be super profitable, but nobody will look up to them anymore.
The financial sector is so absurdly profitable that it makes sense for big companies with a lot of cash to just invest in financial markets rather than actually do things (esp. considering taxpayers will bail you out on tail events, so don't you care about risk!). Famously GM in 2008 had virtually become a financial services company which made cars on the side.
Just another sign that all is not well with the state of things.
I've heard descriptions of large housebuilders in the UK that sound similar - actually building houses is difficult and tricky because you have to actually keep end customers reasonably happy whereas much easier to just treat the land you own in "land banks" as speculative assets and base your business mainly around trading those.
It seems like they did not plan turning into a bank because that would be introducing annoying regulations - but the regulators turned them into a bank.
At a certain size every company becomes a bank. Once a company can do its own banking like things it doesn’t make sense to pay anyone else. It’s somewhat like rich people who can self insure.
Like Ticketmaster? Aren't they just a cash holding business? You buy a ticket for a concert 18 months in the future, they hold the cash doing whatever to preserve it and grow it, then settle up with all interested parties 18 months later?
Data and identity custodians become money custodians, and vice versa. U.S. CFPB requires that banks export personal data when authorized by consumers, laying the groundwork for commercial data vaults. Could a Personal Data Vault on Mac Mini be connected to Apple Private Cloud Compute (PCC) LLM?
> The rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.. Consumers will be able to access, or authorize a third party to access, data such as transaction information, account balance information, information needed to initiate payments, upcoming bill information, and basic account verification information. Financial providers must make this information available without charging fees. The rule moves the United States closer to having a competitive, safe, secure, and reliable “open banking” system.
Perhaps. OTOH, I've seen a number of stories about some Republican politicians noticing that they're now the party of the "ordinary working people", and trying to play that part.
Good point, I don’t really see it. Appointment confirmed by the Senate can do whatever they want, and I don’t see Congress voting as any less than a full party bloc given the razer thin majorities and inability to pass the filibuster
I am surprised by all those "you are not above the law and you can not do what you want" rulings lately, e.g. USA wanting to separate Google and Chrome. Everyone always says lobbyists and corruption rule the US and only the EU puts up a little fight against big tech (e.g. GDPR) but here are refreshing counter examples.
It doesn't take very much observation of the US political system to realize that one party is generally quite good at government (although sadly is much worse at politics), while the other tends to have a higher rate of corruption and generally wants to reduce regulatory power to a minimum to benefit the corporate sector.
I work at a bank (not US one though). Good luck with little everchanging regulation hell all banks are continuously exposed to, it keeps hefty dedicated departments alive and well across whole industry.
Money is a human construct, and like its cousin the easter bunny, conforms to an arbitrary set of rules, and valuable things are created outbof thin air.
Dont beleave me, well then, next spring, walk thee down to a bustling day care center and seek the sage advice of one of the owl eyed littles , who should they discover your lack of understanding, will, should they see your need, fill you in on the phenominon of the easter bunny.
In fact the whole banking industry should
be listened too, as if it has a soft pallet, and while earnest, isn't ready to be in charge of anything.
It's not about Apple. It's Apple, Google and Amazon, PayPal, Block, Venmo and Zelle.[1] Everybody with over 50,000,000 transactions annually gets CFPB oversight. Actual rule: [2]
This doesn't really do much. It creates no consumer rights. It does give CFPB examiners the power to examine records and interview people. It means that numbers such as how many PayPal customers have complaints will be looked at. Bank examiners look at error rates, fraud losses, unresolved complaints, and such. The effect will probably be that some of the big players with weak customer service will have to get their act together.
[1] https://www.consumerfinance.gov/about-us/newsroom/cfpb-final...
[2] https://files.consumerfinance.gov/f/documents/cfpb_final-rul...
> Everybody with over 50,000,000 transactions annually gets CFPB oversight.
This is such a simple, straightforward rule. No weird gotchas, exceptions, or whatever. Just the most basic test you can think of for "are you acting as a financial institution in the most obvious day-to-day sense of the term?" and a reasonably sane (I think?) threshold.
It's also so bloody easy to prepare for. Are you handling 1M transactions anually? No worries, keep doing your thing. Are you handling 20M transactions annually? You probably want to start planning. 40M p.a.? You want to be preempt the moment when you get regulated.
Simple rules are an antidote to corruption and inefficiency, but only if they are paired with transparency and a judicial system willing to enforce the spirit of the laws, lest they be easily gameable.
"willing to enforce the spirit of the laws, lest they be easily gameable."
That is the key, otherwise I see just lots of sub or "independent" companies handling just below 50,000,000 transactions on behalf of the big company.
> This doesn't really do much. It creates no consumer rights. It does give CFPB examiners the power to examine records and interview people
Examination power means the CFPB can act on consumer complaints. It’s an enormous practical expansion of power.
Paypal isn't just treated like a bank, it is a bank, at least in the EU.
Its regulated as an "electronic money institution" in the UK—i.e. its regulated but it does not have the rock solid guarantees that make banks a safe place to keep your savings.
but could paypal legally use the money you deposited inside your paypal account for some other purpose (of their choosing), provided they can front the money back if you ask for it?
In the UK no. This is reserved for Banks only. They can make money on the interest which I presume is why EBay UK has moved to a no-fees model but they now keep your money in a balance rather than paying out immediately.
Under most US money transmitter laws, they can’t do that either, not even off the interest. (Hence why they charge fees to move money)
I am thinking that would also include Stripe? Or is Stripe not consumer facing? Not that Apple is forced to open up NFC worldwide. I am wondering what would happen next? Surely Apple has incentive to own NFC transaction or something like Apple Cash.
Stripe is considered to be acting for a "sponsor bank", the one that handles the merchant's account. Stripe itself does not hold customer or merchant money.
I could swear there was an article here years ago about Stripe getting the bank status.
> major technology firms that offer digital wallets
I don’t think so.
Since I’m not aware of a Stripe Digital Wallet offering of theirs for money movement.
> ...The effect will probably be that some of the big players with weak customer service will have to get their act together...
Agreed that maybe *explicitly* consumer rights are not added on so to speak...but if you are correct about the effect being improved customer service, i would say that would be a big "consumer rights" win! I'll take that over keeping the status quo of crap customer service.
> The effect will probably be that some of the big players with weak customer service will have to get their act together.
Heh, if PayPal ever gets rid of its reputation for dodgyness, and it also provides reasonable customer service, then it might because a decent option.
> if PayPal ever gets rid of its reputation for dodgyness
First they’d have to stop doing dodgy things. But they just keep doing more.
https://wasnever.cool/@schmutzie/113222747933501630
Yeah, I don't personally reckon it's going to happen any time soon either.
It's written like it's a strange thing:
> role is normally limited to banks and financial services companies.
Was anyone expecting a system that handles 6 trillion dollars a year to not fall under financial regulatory purview?
Which I realise is not the actual thrust of the rule change (obviously they were already under some regs already), but it's just such an odd intro.
Apple withdrawing Pay Later when it became clear they'd need to comply with lending regs is quite telling too. Presumably they were attempting to sneak in the back door and claim "it's tech not banking" and got told they're not above the law when the Truth in Lending Act was confirmed to cover the system.
> Was anyone expecting a system that handles 6 trillion dollars a year to not fall under financial regulatory purview?
9to5mac and Apple at the very least.
I mean in that regard then Apple's legal department would have been extraordinarily derelict in their duties if this was a surprise.
As someone who runs an actual bank, the headlines around this story are super misleading. In no meaningful way will be Apple be treated like a bank in the way that we generally expect banks to be treated.
Yeah. The headline had me thinking of cash reserves, fractional lending constraints, etc.
A friend of mine , 15 years ago (ios 3), already predicted that the only reason why apple would stash that amount of cash was if they planned on turning into a bank.
Hats off to you, my friend !
I said the same thing, and I'm going to do one more prediction: the banking business will become more and more profitable with very low risk to the point it will take more and more space in Apple's culture.
Also, regulations and the hiring market mean they will have to hire more and more profiles than you typically find in finance. With Jobs dead and an aging Cook that can't willpower himself into everything anymore, nothing will cancel this effect.
Eventually, this will lower Apple taste for innovation and the product quality will go down until they become another average player cashing in on the inertia of its past success.
They will be super profitable, but nobody will look up to them anymore.
The financial sector is so absurdly profitable that it makes sense for big companies with a lot of cash to just invest in financial markets rather than actually do things (esp. considering taxpayers will bail you out on tail events, so don't you care about risk!). Famously GM in 2008 had virtually become a financial services company which made cars on the side.
Just another sign that all is not well with the state of things.
I've heard descriptions of large housebuilders in the UK that sound similar - actually building houses is difficult and tricky because you have to actually keep end customers reasonably happy whereas much easier to just treat the land you own in "land banks" as speculative assets and base your business mainly around trading those.
It seems like they did not plan turning into a bank because that would be introducing annoying regulations - but the regulators turned them into a bank.
At a certain size every company becomes a bank. Once a company can do its own banking like things it doesn’t make sense to pay anyone else. It’s somewhat like rich people who can self insure.
Like Ticketmaster? Aren't they just a cash holding business? You buy a ticket for a concert 18 months in the future, they hold the cash doing whatever to preserve it and grow it, then settle up with all interested parties 18 months later?
Car makers are the classic example. Why ship all that loan business to a bank, when they could be the bank.
IDK who gets paid when from TM, but if they start offering people the ability to buy tickets on TM credit - yeah, bank.
Data and identity custodians become money custodians, and vice versa. U.S. CFPB requires that banks export personal data when authorized by consumers, laying the groundwork for commercial data vaults. Could a Personal Data Vault on Mac Mini be connected to Apple Private Cloud Compute (PCC) LLM?
https://www.consumerfinance.gov/about-us/newsroom/cfpb-final...
> The rule requires financial institutions, credit card issuers, and other financial providers to unlock an individual’s personal financial data and transfer it to another provider at the consumer’s request for free.. Consumers will be able to access, or authorize a third party to access, data such as transaction information, account balance information, information needed to initiate payments, upcoming bill information, and basic account verification information. Financial providers must make this information available without charging fees. The rule moves the United States closer to having a competitive, safe, secure, and reliable “open banking” system.
Will Facebook return to the digital currency business? https://en.wikipedia.org/wiki/Diem_(digital_currency)
> Will Facebook return to the digital currency business?
Good question. Probably not, especially after this. If you handle other peoples' money, you have legal responsibilities. Facebook hates that.
Previously: https://news.ycombinator.com/item?id=42203655
If anything, Apple will be bailing the Fed out.
If I was a betting man, which I am, I wouldnt draw attention to myself if I was the CFPB
Do you mean Apple? Your comment is unclear as-is.
The CFPB shouldn’t expand regulatory oversight of a large player that doesn’t want additional regulatory oversight
because this is an unfavorable political environment for the CFPB’s continued existence
unilaterally covering someone that could challenge the authority just accelerates the outcome
Perhaps. OTOH, I've seen a number of stories about some Republican politicians noticing that they're now the party of the "ordinary working people", and trying to play that part.
Good point, I don’t really see it. Appointment confirmed by the Senate can do whatever they want, and I don’t see Congress voting as any less than a full party bloc given the razer thin majorities and inability to pass the filibuster
I am surprised by all those "you are not above the law and you can not do what you want" rulings lately, e.g. USA wanting to separate Google and Chrome. Everyone always says lobbyists and corruption rule the US and only the EU puts up a little fight against big tech (e.g. GDPR) but here are refreshing counter examples.
It doesn't take very much observation of the US political system to realize that one party is generally quite good at government (although sadly is much worse at politics), while the other tends to have a higher rate of corruption and generally wants to reduce regulatory power to a minimum to benefit the corporate sector.
I work at a bank (not US one though). Good luck with little everchanging regulation hell all banks are continuously exposed to, it keeps hefty dedicated departments alive and well across whole industry.
> Good luck with little everchanging regulation hell all banks are continuously exposed to, it keeps hefty dedicated departments alive
Isn't it the whole game? New regulations try to prevent banks from abusing, and in return banks try to abuse the new regulations?
Banks wouldn't do it if it wasn't profitable, right?
> Good luck with little everchanging regulation hell all banks are continuously exposed to
Banks would have less regulation if they handn't fucked, quite litterally, the entire world less than 15 years ago.
Money is a human construct, and like its cousin the easter bunny, conforms to an arbitrary set of rules, and valuable things are created outbof thin air. Dont beleave me, well then, next spring, walk thee down to a bustling day care center and seek the sage advice of one of the owl eyed littles , who should they discover your lack of understanding, will, should they see your need, fill you in on the phenominon of the easter bunny. In fact the whole banking industry should be listened too, as if it has a soft pallet, and while earnest, isn't ready to be in charge of anything.