{"id":356907,"date":"2023-06-05T10:20:20","date_gmt":"2023-06-05T14:20:20","guid":{"rendered":"https:\/\/www.sgtreport.com\/?p=356907"},"modified":"2023-06-04T21:29:23","modified_gmt":"2023-06-05T01:29:23","slug":"setting-the-stage-for-bank-failures-and-rollout-of-fednow-u-s-government-warns-consumers-not-to-keep-money-in-venmo-cashapp-and-paypal","status":"publish","type":"post","link":"https:\/\/www.sgtreport.com\/2023\/06\/setting-the-stage-for-bank-failures-and-rollout-of-fednow-u-s-government-warns-consumers-not-to-keep-money-in-venmo-cashapp-and-paypal\/","title":{"rendered":"Setting the Stage for Bank Failures and Rollout of FedNow? U.S. Government Warns Consumers Not to Keep Money in Venmo, CashApp, and PayPal"},"content":{"rendered":"

by Brian Shilhavy, Health Impact News<\/a>:<\/em><\/p>\n

\"\"The Consumer Financial Protection Bureau (CFPB) published a warning to consumers this past week stating that funds held in popular online payment apps, such as Paypal, Cash App, and Venmo, lack FDIC insurance and should be transferred to \u201cinsured banks and credit unions<\/em>.\u201d<\/p>\n

TRUTH LIVES on at\u00a0https:\/\/sgtreport.tv\/<\/a><\/p>\n

CFPB Finds that Billions of Dollars Stored on Popular Payment Apps May Lack Federal Insurance<\/strong><\/p>\n

Agency issues notice to consumers advising them to transfer balances to insured banks and credit unions<\/em><\/p>\n

WASHINGTON, D.C. \u2013 The Consumer Financial Protection Bureau (CFPB) published an issue spotlight on digital payment apps heavily used by consumers and businesses. The analysis finds that funds stored on these apps may not be safe in the event of financial distress, since the funds may not be held in accounts with federal deposit insurance coverage. The CFPB also issued a consumer advisory for customers holding funds in these apps and how they can make sure their funds remain safe.<\/p>\n

\u201cPopular digital payment apps are increasingly used as substitutes for a traditional bank or credit union account but lack the same protections to ensure that funds are safe,\u201d said CFPB Director Rohit Chopra. \u201cAs 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.\u201d<\/p>\n

Use of nonbank payment apps such as PayPal, Venmo, and Cash App have rapidly grown in the past few years. These apps allow people to quickly pay retailers and others, while providing the option to store funds. Unlike traditional bank and credit union accounts which have deposit insurance, funds stored in these nonbank payment companies may be unprotected.<\/p>\n

In recent months, many Americans were reminded that funds deposited with banks and credit unions enjoy the safety afforded by federal deposit insurance through the FDIC or NCUA.<\/p>\n

Americans witnessed the failure of large systemically important banks such as Silicon Valley Bank, Signature Bank, and First Republic Bank. These banks experienced a run, but insured depositors could have confidence their money was safe. However, similar protection would not be guaranteed to customers that store money on nonbank payment apps. (Source<\/a>.)<\/p><\/blockquote>\n

What is the \u201cConsumer Financial Protection Bureau<\/em>\u201c? Why are they issuing this warning, which could obviously have a serious negative impact on these payment apps if many consumers take their advice and start withdrawing their funds from them?<\/p>\n

The \u201cAbout Us\u201d page on their website, which at the bottom of every page in their footer says: \u201cAn official website of the\u00a0<\/em>United States government<\/em>\u201c, doesn\u2019t give much information about who they are:<\/span><\/p>\n

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. (Source<\/a>.)<\/p><\/blockquote>\n

Whenever a website, especially one that claims to be \u201cAn official website of the\u00a0<\/em>United States government\u201d,\u00a0<\/em>does not give much information on their \u201cAbout Us\u201d page, the next thing to check is: who are the people running this organization?<\/span><\/p>\n

Rohit Chopra is the director.<\/p>\n

Rohit Chopra is Director of the Consumer Financial Protection Bureau. The CFPB is\u00a0a unit of the Federal Reserve System<\/strong>\u00a0charged with protecting families and honest businesses from illegal practices by financial institutions, and ensuring that markets for consumer financial products and services are fair, transparent, and competitive.<\/p>\n

As Director, Chopra is also a member of the Board of Directors of the Federal Deposit Insurance Corporation and the Financial Stability Oversight Council. (Source<\/a>.)<\/p><\/blockquote>\n

Bingo! So the CFPB is a \u201cunit\u201d of the U.S. Federal Reserve Central Banking System.<\/p>\n

This \u201cunit\u201d was created in 2010 under the Obama Administration, and according to\u00a0their history on Wikipedia<\/a>, it has been involved in controversy since its inception.<\/p>\n

The CFPB\u2019s creation was authorized by the Dodd\u2013Frank Wall Street Reform and Consumer Protection Act, whose passage in 2010 was a legislative response to the financial crisis of 2007\u201308 and the subsequent Great Recession and is an independent bureau within the Federal Reserve.<\/p>\n

The CFPB\u2019s status as an independent agency has been subject to many challenges in court. In June 2020, the United States Supreme Court found the single-director structure removable only with-cause unconstitutional but allowed the agency to remain in operation.<\/p>\n

On September 17, 2010, President Obama announced the appointment of Warren as\u00a0Assistant to the President<\/a>\u00a0and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau to set up the new agency.<\/p>\n

Due to the way the legislation creating the bureau was written, until the first Director was in place, the agency was not able to write new rules or supervise financial institutions other than banks.<\/p>\n

On July 21, 2011, Senator\u00a0Richard Shelby\u00a0wrote an\u00a0op\u2011ed\u00a0for\u00a0The Wall Street Journal<\/i>\u00a0affirming his continued opposition to a centralized structure, noting that both the\u00a0Securities Exchange Commission\u00a0and\u00a0Federal Deposit Insurance Corporation\u00a0had executive boards and that the CFPB should be no different. He noted lessons learned from experiences with\u00a0Fannie Mae\u00a0and\u00a0Freddie Mac\u00a0as support for his argument.<\/p>\n

Politico<\/i>\u00a0interpreted Shelby\u2019s statements as saying that Cordray\u2019s nomination was \u201cdead on arrival\u201d.\u00a0Republican threats of a\u00a0filibuster to block the nomination in December 2011 led to Senate inaction.<\/p>\n

President\u00a0Barack Obama announced the nomination of Richard Cordray\u00a0as the first director of the CFPB on July 18, 2011.<\/p>\n

Elizabeth Warren, who proposed and established the CFPB, was removed from consideration as the bureau\u2019s first formal director after Obama administration officials became convinced Warren could not overcome strong\u00a0Republican\u00a0opposition.<\/p>\n

On July 17, President Obama nominated former\u00a0Ohio Attorney General\u00a0and\u00a0Ohio State Treasurer\u00a0Richard Cordray\u00a0to be the first formal director of the CFPB.\u00a0Prior to his nomination, Cordray had been hired as chief of enforcement for the agency.<\/p>\n

However, Cordray\u2019s nomination was immediately in jeopardy due to 44\u00a0Senate\u00a0Republicans vowing to derail any nominee in order to encourage a decentralized structure of the organization. Senate Republicans had also shown a pattern of refusing to consider regulatory agency nominees.\u00a0The CFPB formally began operation on July 21, 2011.<\/p>\n

Since the CFPB database was established in 2011, more than 730,000 complaints have been published.\u00a0CFPB supporters include the\u00a0Consumers Union\u00a0claim that it is a \u201cvital tool that can help consumers make informed decisions\u201d.<\/p>\n

CFPB detractors argue that the CFPB database is a \u201cgotcha game\u201d and that there is already a database maintained by the\u00a0Federal Trade Commission\u00a0although that information is not available to the public.<\/p>\n

On January 4, 2012,\u00a0Barack Obama\u00a0issued a\u00a0recess appointment\u00a0to install Cordray as director through the end of 2013.<\/p>\n

This was a highly controversial move as the Senate was still holding\u00a0pro forma<\/i>\u00a0sessions, and the possibility existed that the appointment could be challenged in court.<\/p>\n

This type of recess appointment was unanimously ruled unconstitutional in\u00a0NLRB v. Noel Canning<\/i>.<\/p>\n

On July 16, 2013, the Senate confirmed Cordray as director in a 66\u201334 vote.\u00a0Cordray resigned in late 2017 to run for governor of Ohio.<\/p>\n

The\u00a0Financial CHOICE Act, proposed by the House Financial Services Committee\u2019s\u00a0Jeb Hensarling, to repeal the\u00a0Dodd\u2013Frank Wall Street Reform and Consumer Protection Act, passed the House on June 8, 2017. Also in June 2017, the Senate was crafting its own reform bill.<\/p>\n

Testimony in US Congressional hearings of 2017 have elicited concerns that the wholesale publication of consumer complaints is both misleading and injurious to the consumer market.<\/p>\n

Rep.\u00a0Barry Loudermilk\u00a0(R-GA) said at one such congressional hearing, \u201cIs the purpose of the database just to name and shame companies? Or should they have a disclaimer on there that says it\u2019s a fact-free zone, or this is fake news? That\u2019s really what I see happening here.\u201d<\/p>\n

Bill Himpler, executive vice president of the\u00a0American Financial Services Association, a trade group representing banks and other lenders responded \u201cSomething needs to be done.\u201d \u201cOnce the damage is done to a company, it\u2019s hard to get your reputation back.\u201d<\/p>\n

Mick Mulvaney, as acting director of the CFPB, removed all 25 members of the agency\u2019s Consumer Advisory Board on June 5, 2018, after eleven of them held a press conference on June 3 in which they criticized him.\u00a0<\/strong>(Editor\u2019s Note<\/strong>:\u00a0This was under the Trump Administration<\/em>.)<\/p>\n

On February 13, 2021, President\u00a0Joe Biden\u00a0formally submitted to the Senate the nomination of\u00a0Rohit Chopra\u00a0to serve as director of the CFPB.\u00a0His nomination was approved on September 30, 2021, by a 50-48 vote.<\/p>\n

On October 20th, 2022 The Fifth Circuit Court of Appeals struck down the CFPB\u2019s payday lending rule on the grounds that the funds used to draft the bill were unconstitutionally obtained. This court ruling only impacts the 5th circuit. (Full article<\/a>.)<\/p><\/blockquote>\n

So what can we learn from this warning published on this \u201cofficial website of the\u00a0<\/em>United States government\u201d\u00a0<\/em>which is actually a unit of the Federal Reserve Central Banking System?<\/span><\/p>\n

First, it is obvious that they are expecting more bank failures. As\u00a0I have previously reported<\/a>, the Biden Administration is no longer stating that the U.S. Banking system is \u201csafe and sound.\u201d<\/p>\n

Read More @ HealthImpactNews.com<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

by Brian Shilhavy, Health Impact News: The Consumer Financial Protection Bureau (CFPB) published a warning to consumers this past week stating that funds held in popular online payment apps, such as Paypal, Cash App, and Venmo, lack FDIC insurance and should be transferred to \u201cinsured banks and credit unions.\u201d<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[153989,154020,153905,153896,153880,153899,126466],"tags":[156246,156245,156244],"_links":{"self":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts\/356907"}],"collection":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/comments?post=356907"}],"version-history":[{"count":1,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts\/356907\/revisions"}],"predecessor-version":[{"id":356908,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/posts\/356907\/revisions\/356908"}],"wp:attachment":[{"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/media?parent=356907"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/categories?post=356907"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sgtreport.com\/wp-json\/wp\/v2\/tags?post=356907"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}