TLDR: in order to protect consumers and to avoid a competitive advantage to new forms of electronic fund transfers over traditional ones, the Electronic Funds Transfer Act (EFTA) should be reinterpreted to apply to crypto.

Specifically, "virtual currency wallets" that can hold and transfer fungible tokens and stablecoins should be considered a consumer account that is regulated by the CFPB.

Under this regime, the wallet provider and not the consumer would be responsible for any "unauthorized transfers" including "transfers initiated by a person who obtained a consumer’s access device through fraud or robbery . . . [or] when a bad actor obtains a consumer’s account credential through computer hacking or other forms of cyber theft and uses that credential to steal funds."

Hacked because you tweeted you emailed your seed phrase or believed that fashion model in Malaysia needed 5000 bucks to fly to see you? Don't worry your wallet might have to cover it . . .

Wallet providers also would be required to provide disclosures and terms and conditions when the consumer first uses their product. "The disclosures must include a summary of various consumer rights . . . including the consumer’s liability for unauthorized EFTs, the types of EFTs the consumer may make, limits on the frequency or dollar amount, fees charged by the financial institution, and the error-resolution procedures. . . . also require[d is providing] regular, periodic statements, and change-in-terms notices."

So should wallet providers (both custodial and non-custodial) now be financial institutions for purposes of the EFTA? The CFPB says they don't need to ask the public what they think but are doing so anyway (how courteous of them) through the end of March 2025.

And you thought the Warrenites were done with us, didn't you? Their co-opting of crypto under the banner of consumer protection (who can argue with protecting consumers after all?) won't stop until someone stops it. And that someone is the next President of the United States. So add this to the list of "law by decree" problems that need to be fixed.