CFPB Faces Legal Heat Over Digital Wallet Oversight Expansion

The lawsuit, initiated by TechNet and NetChoice on January 16, targets a December 2024 rule issued by the Consumer Financial Protection Bureau (CFPB), which expands its oversight to include widely used payment platforms like Apple Pay, PayPal, Venmo, and Google Wallet.

The new rule allows the CFPB to monitor compliance with privacy and fraud laws through regular examinations of these platforms. However, it does not include crypto wallets or decentralized payment systems.

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The CFPB argues that this step is necessary to protect personal data, combat fraud, and prevent sudden account closures.

The plaintiffs claim that these companies are already subject to strict state regulations, which makes additional federal oversight unnecessary.

They argue that the CFPB has not identified any regulatory gaps to justify its new rule and describe the decision as “arbitrary and capricious”. The lawsuit seeks to have the rule declared unlawful and beyond the agency’s authority.

Critics, including NetChoice, say the rule imposes unnecessary barriers on businesses and stifles innovation. They argue that the CFPB’s actions could lead to higher costs and fewer options for consumers.

Meanwhile, a US law firm called Burwick Law plans a lawsuit against Pump.fun, a Solana SOL $171.89 -based meme coin platform. What is the lawsuit about? Read the full story.