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The CFPB’s Digital Payments Power Grab Usurps Congress & Harms Consumers

WASHINGTON—Yesterday, NetChoice filed comments to the Consumer Finance Protection Bureau (CFPB), arguing their new proposed rulemaking on virtually every online digital payment violates the Major Questions Doctrine and harms American consumers.

The CFPB’s Notice of Proposed Rulemaking (NPRM) on “New Federal Oversight of Big Tech Companies and Other Providers of Digital Wallets and Payment Apps” aims to extend CFPB’s regulatory authority over virtually every online digital payment such as Apple Wallet, Google Pay, PayPal, and even things like video game currency, to include all general-use digital consumer payment applications. 

In our filing, NetChoice explains the main problems with the CFPB’s proposed rulemaking on this issue:

  1. It Violates the Major Questions Doctrine: The CFPB’s attempt to regulate digital payment apps and wallets is a drastic and unwarranted expansion of its authority. The CFPB’s current mission, as per its own documentation, does not include the oversight of digital payment methods. Such a move contradicts the Major Questions Doctrine by assuming powers that Congress has not explicitly granted. It is a significant power grab.
  2. It Is Harmful to Innovation and May Increase Prices for Consumers: If implemented, this rulemaking could impede innovation in the digital payments sector. These increased regulatory burdens from the government could raise production costs, subsequently leading to higher prices for consumers. 
  3. It Could Impact Consumer Privacy: There is an expressed concern about the potential risk to consumer privacy due to the broadened scope of the CFPB’s authority. If implemented, the rule could result in more individuals and entities having access to sensitive consumer data, which significantly increases the likelihood of its misuse or unintended, harmful dissemination. 

“The role of Congress in such major regulatory decisions is critical. Bypassing the legislative process in this manner undermines the very foundations of our democratic system,” said Carl Szabo, NetChoice Vice President & General Counsel. “Innovation thrives in a landscape free from unnecessary government intrusion. The CFPB’s rule, as proposed, is a direct threat to new entrants to our digital economy, will result in less competition and will harm consumers.

You can read NetChoice’s NPRM filing to the CFPB here

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