After high-profile bank collapses sent shockwaves through the banking system last month, regulators also hold some concerns about digital wallets and money transfer apps that consumers often use as bank accounts, The Hill reported. “I’m very worried,” said Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB). “A lot of people are storing money in peer-to-peer apps and online payment systems,” he continued. “Apps like CashApp, Venmo, Paypal have become part of the digital wallets of so many Americans, but many may not know whether those funds are insured or not.” Many of these apps are regulated as money transmitters — commonly used for international remittance payments — instead of banks, Chopra said. Banks are subject to stricter federal regulation and oversight. Banks overseen by the Federal Deposit Insurance Commission (FDIC) are also backed up by up to $250,000 in deposit insurance per account. “Many people think of this as like a bank account, as a place I can store funds, but the reality is it’s not like a bank account and there are certain circumstances where those balances may not be fully insured,” he said.
