Two technology trade groups, TechNet and NetChoice, have filed a lawsuit against the US Consumer Financial Protection Bureau (CFPB) for a new rule treating payment apps and digital wallets like banks. Issued in December, the rule expands the CFPB's authority over 'general-use digital consumer payment applications,' targeting larger companies like Apple Pay, Google Wallet, PayPal, and Venmo. Critics argue this move is an unlawful power grab that complicates regulations for businesses already overseen at the state level, ultimately causing increased consumer costs and reduced options. The plaintiffs claim the rule is arbitrary and capricious, requesting it be deemed unlawful. The lawsuit coincided with a CFPB fine against Cash App for inadequate fraud protections, further highlighting regulatory tensions. The CFPB asserts the new rule aims to protect personal data and reduce fraud, but opponents believe it undermines innovation in a rapidly evolving sector.

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