Technology trade groups are suing the Consumer Financial Protection Bureau, saying the agency should not have regulatory oversight over mobile payment apps.
In the suit, filed Thursday in U.S. District Court in Washington, D.C., tech trade groups TechNet and NetChoice say the CFPB does not have congressional approval to regulate apps that offer consumer financial services like Venmo or Apple Wallet.
The suit is in reaction to the CFPB’s final rule, released last November, which said the bureau would provide the same protections to mobile financial services customers that it does for customers at established banks.
NetChoice and TechNet want to block the rule, saying it is a “power grab” that will raise prices on consumers and subject digital financial services companies to undue regulation.
“The bureau failed to show what consumer risks the rule was even meant to alleviate in its haste to dream up a problem in search of a solution,” the suit reads.
When the final rule was announced, CFPB head Rohit Chopra said the widespread use and popularity of mobile financial services apps like Venmo made the rule necessary. The rule applies only to apps that handle more than 50 million transactions a year. The CFPB reported that some of the most popular apps handle upwards of 13 billion transactions a year.
The lawsuit comes as President-elect Donald Trump is set to shake up the leadership of U.S. regulatory bodies. While Mr. Trump has not commented directly on the rule, the CFPB in general has been in conservative’s crosshairs in recent months, with Mr. Trump’s close ally Elon Musk calling for the bureau’s dissolution.
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