The alert comes several weeks after the failure of Silicon Valley Bank, Signature Bank and First Republic Bank, which all experienced bank runs after fearful customers with uninsured deposits pulled their money en masse.
NEW YORK — Customers of Venmo, PayPal and CashApp should not store their money with those apps for the long term because the funds might not be safe during a crisis, the Consumer Financial Protection Bureau warned Thursday.
Some of the funds may be eligible for pass-through insurance coverage if customers do certain activities with the apps, the CFPB said, but generally by default the apps are not covered by deposit insurance. For example, if a customer opened a PayPal Savings account, it would have deposit insurance through PayPal’s partner bank, Synchrony Bank. But the general PayPal account is not covered by insurance.
“Consumers may not fully appreciate when, or under what conditions, they would be protected by deposit insurance,” the agency added in its report. Apple recently announced a savings account tied to its Apple Card that is operated by Goldman Sachs. The savings account took in billions of dollars in deposits within days of its launch.
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Money stored in Venmo, other payment apps could be vulnerable, financial watchdog warnsCustomers of Venmo, PayPal and CashApp should not store their money for the long term with these apps since their funds may not be covered by deposit insurance, the Consumer Financial Protection Bureau warned on Thursday.
Weiterlesen »
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Weiterlesen »