CFPB’s Increasing Pressure on Digital Wallets and Payment Apps: What Fintechs and Lenders Need to Know

Over the past few years, digital wallets and payment apps have quietly taken over daily financial life. Consumers now use them for everything from splitting a dinner bill to paying rent. That growth has caught the attention of the Consumer Financial Protection Bureau (CFPB), and the agency is making it clear that fintech companies, lenders, and payment platforms are now firmly within its regulatory sights. If your business relies on digital payments or integrates with any consumer-facing financial tool, the rules are changing, and your contracts need to reflect that shift.

Below, we break down what this new CFPB focus means for fintech operators, lenders, service providers, and anyone relying on digital payment infrastructure. 

Why Is the CFPB Targeting Digital Wallets and Payment Apps in 2025?

The CFPB has made one thing clear: digital payments are no longer a niche industry. Billions of dollars now move through apps like Apple Pay, Cash App, Venmo, Zelle, and dozens of emerging fintech platforms each year. With that growth has come consumer complaints relating to:

• Unauthorized transfers
• Unclear fees
• Deceptive marketing
• Data collection and biometric tracking
• Disruptions from outages or service freezes

Because these companies handle consumer funds and data, the CFPB is increasing scrutiny under laws traditionally applied to banks and lenders, including the Electronic Fund Transfer Act, the Consumer Financial Protection Act, and various unfair/deceptive practices rules.

For fintech companies, the message is simple: if you handle consumer payments, the CFPB sees you as a regulated financial actor. Your contracts must reflect this reality.

What Are the Biggest Compliance Risks for Digital Wallets and Payment Apps?

If you operate in this space, here are the risks the CFPB is watching most closely:

1. Unclear or Missing Disclosures in User Agreements

Consumers must understand how fees work, how their data is used, and what happens during a dispute. Vague terms create liability.

2. Unauthorized Transfers and Fraud Handling

Digital payment apps face growing pressure to reimburse users when fraud or unauthorized charges occur, especially when internal controls fail.

3. Data Privacy and AI-Driven Tracking

Many apps collect behavioral, location, or biometric data. The CFPB is examining how this data is used, shared, and monetized.

4. Payment Freezes and Account Restrictions

Users complain when platforms freeze accounts without explanation. The CFPB is now asking for detail on internal policies and audit trails.

5. Lender Partnerships and “Banking-as-a-Service” Models

If your fintech partners with a bank, both parties now face joint scrutiny of compliance workflows, disclosures, and risk allocation. This is where having strong contracts becomes essential.

How Fintech and Lender Contracts Must Change Under CFPB Scrutiny

With the new regulatory landscape, generic templates and outdated agreements can expose your business to enforcement actions. Instead, companies should be updating contracts to address these emerging issues.

1. Risk Allocation Clauses for Unauthorized Transfers

Contracts need clear statements about:

• Who bears the risk of fraudulent transfers
• Timeframes for investigation
• Chargeback procedures
• Dispute escalation protocols

This protects both platform operators and users.

2. Detailed Data-Use and Privacy Clauses

Fintech companies must now specify:

• What consumer data is collected
• How long it is stored
• Whether third parties receive it
• Whether AI systems process or analyze it

The CFPB is particularly interested in disclosures around biometric data.

3. Clear Fee and Pricing Disclosures

If you charge service fees, transfer fees, or subscription charges, those terms must be unambiguous and easy to understand. Ambiguity creates regulatory exposure.

4. Revised Indemnity Clauses for Fintech-Bank Partnerships

Partnership agreements should clarify:

• Which party handles compliance failures
• Liability for regulatory violations
• Obligations during a CFPB investigation
• Responsibility for consumer complaints

Well-drafted indemnity terms can prevent costly disputes between partners.

5. Operational Requirements for Service Interruptions

If your platform goes down, freezes funds, or pauses transactions, regulators will want transparency. Contracts should establish:

• Notice obligations to users
• Internal reporting requirements
• Business continuity expectations
• Timeframes for addressing outages

This is especially important for companies dealing with high-volume transfers.

Why Fintech Companies Should Update Contracts Before Problems Arise

Many businesses wait for a conflict, consumer complaint, or regulatory letter before updating agreements. But in this space, prevention is far more cost-effective than reaction.

Revising your contracts now:

• Reduces the likelihood of CFPB investigations
• Establishes predictable procedures for disputes
• Limits liability in fraud scenarios
• Strengthens your position with banking partners
• Protects your company’s intellectual property, data systems, and AI models
• Creates clarity that reduces operational risk

Digital payments operate at high speed, and you cannot afford legal uncertainty slowing you down.

A Practical Next Step: Contract Review for Fintech and Payment Operators

At Ayala Law, our attorneys regularly handle business litigation, fintech disputes, and contract drafting for companies navigating these issues. We represent businesses throughout Florida and across state lines, and we can help you revise your agreements before problems arise.

If you run a fintech platform, offer digital wallet services, partner with a lender, or rely on any “banking-as-a-service” structure, contact an experienced attorney in Miami at 305-570-2208.

You can also contact our team directly at: arianna@ayalalawpa.com  

Schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].