CFPB Expands Authority Over Google Payment Corp Amid Legal Challenge

The CFPB has claimed oversight of Google Payment Corp., prompting the company to legally challenge the agency's authority in a significant regulatory expansion.

The Consumer Financial Protection Bureau (CFPB) has recently claimed its supervisory powers over Google Payment Corp., signaling a notable broadening of its oversight into nonbank financial services.

In reaction to this move, a subsidiary of Alphabet Inc. has decided to take legal action against the bureau.

CFPB’s Oversight and Legal Action

In a statement released on Friday, the CFPB revealed that while this decision opens the door for potential evaluations of Google Payment’s practices, it does not guarantee that such investigations will take place, nor does it suggest any wrongdoing by the company.

The bureau asserted that Google Payment Corp. already falls under its enforcement jurisdiction but has now determined that the company meets the criteria for enhanced supervision.

Despite Google’s discontinuation of the Google Pay app in the U.S., the CFPB highlighted that some users might still have funds connected to their accounts.

Google’s Legal Challenge

In the lawsuit, which was lodged in a federal court in Washington, Google challenges the CFPB’s authority and the legitimacy of Director Rohit Chopra’s oversight over its operations.

The tech giant contends that the bureau’s ruling is riddled with legal ambiguities and insists that there are currently no consumer risks associated with its payment services, nor are any anticipated.

José Castañeda, a spokesperson for Google, described the CFPB’s actions as an excessive reach, asserting that the peer-to-peer payment features of Google Pay did not present significant risks, especially since they are no longer offered in the U.S. The company is determinedly fighting the ruling in court.

CFPB’s Regulatory Approach

Additionally, a report from the CFPB in 2022 indicated that the agency has not fully exercised its regulatory powers to investigate nonbank financial institutions that could pose risks to consumers.

These supervisory assessments, which remain confidential, are designed to help companies pinpoint possible regulatory breaches, and most organizations contacted about this oversight typically agree to it.

Source: Insurancejournal