The Consumer Financial Protection Bureau has released a new report advising Americans not to keep too much money in payment apps like Venmo and PayPal.
The Consumer Financial Protection Bureau has advised Americans not to store money in payment apps
You probably don’t want to keep money in your Venmo and PayPal accounts for days, weeks, or even months. This is the official position of federal agencies warning users of popular payment apps such as Venmo, PayPal, and Cash App not to store large amounts of money in the apps as it may put them at risk. In a report and consumer advisory released Thursday by the Consumer Financial Protection Bureau, these are just apps, not state-regulated banks, so deposits on payment apps can be made like regular banks. The Consumer Financial Protection Bureau announced that it may not be covered by national insurance.
Worrying is the lack of federal regulation and banking-like oversight of the app
According to the CFPB, without deposit insurance, if funds become unavailable, such as in a bankruptcy filing, users have little or no chance of getting their money back, and the funds could be lost forever. ‘‘As high-tech companies move into the banking and payments space, the CFPB is increasing its focus on companies that circumvent longstanding protections of local banks and credit unions,‘‘ CFPB President Rohit Chopra said in a statement.