On January 16, two technology trade groups filed a lawsuit against the U.S. Consumer Financial Protection Bureau to challenge a new rule granting the regulator oversight over payment apps and digital wallets offered by major non-bank entities.
NetChoice and TechNet argued that the CFPB lacks the authority to excessively regulate large non-bank providers of financial services through platforms like Apple Wallet, Google Pay, and Venmo without clear evidence of consumer risks or regulatory gaps justifying such actions.
The complaint filed in a federal court in Washington, D.C., highlighted the lack of rationale behind the rule, stating that the CFPB rushed to address a non-existent issue.
The CFPB refrained from commenting on the lawsuit. The new rule, effective since November 21, aims to extend consumer protections against fraud and privacy violations to users of prominent tech companies facilitating payment transactions.
NetChoice emphasized concerns about the rule being an overreach that could impede innovation, decrease competition, and lead to higher costs, while TechNet raised issues about potential encroachment into areas beyond the CFPB's core mandate.
The future of the rule might be subject to change under the upcoming administration, with expectations of efforts to limit the CFPB's regulatory reach by the Republican-controlled Congress.
The legal case is TechNet et al v CFPB et al, U.S. District Court, District of Columbia, No. 25-00118.