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They need to be insured like bank accounts. Everyone I know that makes less than 50k a year is getting their shit direct deposited to cashapp and using cashapp like it's their bank. If they go belly up in a financial crash, it's going to be like the great depression, but only for already poor folk
Cashapp doesn't hold customer money. It has banking partners that hold customer funds.
There's a secondary problem.
If a user has money in their account and the app creator goes under, they lose access but the actual bank hasn't failed. Insurance on the account doesn't kick in because there's no bank failure to mitigate, but the user still doesn't have access to their money before.
These regulations weren't written with banking-as-a-service in mind, and don't hold up well now that it's not a weird edge case but a primary way companies provide banking services.
Do people store their money in these things? I use Google pay quite often, but it draws the money from the bank at the time of payment
It will give the CFPB the authority to oversee their compliance with federal laws surrounding privacy, fraud, and other rules through “proactive examinations.”
It's to help stop scams, not for people trying to use them as a bank or something.