Money at Risk in Apps

The Consumer Financial Protection Bureau (CFPB) has warned that money held in nonbank, peer-to-peer payment apps is not protected by federal deposit insurance. The CFPB stated that if these platforms fail, the funds stored on them would be at risk, potentially leading to users losing their money. While popular payment apps such as PayPal, Cash App, and Zelle are not currently in danger of collapsing, the CFPB emphasized the importance of deposit insurance protection, especially in light of recent bank failures. The CFPB highlighted the lack of safeguards and protections these apps offer, despite being used as substitutes for traditional bank accounts. The agency also expressed concerns about tech companies expanding into banking and payments, and it is monitoring their adherence to fiscal safeguards.