Two technology trade groups have filed a lawsuit against the US Consumer Financial Protection Bureau (CFPB), challenging its recent ruling that treats payment apps and digital wallets as banks. Issued in December, the rule expands the CFPB’s supervisory scope over major non-bank providers like Apple Pay, Google Wallet, PayPal, and Venmo. The complaint claims this expansion is an unlawful overreach, undermining the rule of law and risking consumer innovation. NetChoice and TechNet assert the companies targeted are already regulated at the state level and that the CFPB failed to demonstrate any regulatory gaps warranting this intervention. They describe the ruling as ‘arbitrary and capricious’ and seek the court to declare it beyond the Bureau’s authority. The lawsuit coincided with the CFPB fining Cash App’s parent company for inadequate fraud protection. Overall, the plaintiffs argue the new rule imposes unnecessary barriers for businesses that could affect pricing and options for consumers.

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