A pair of trade groups representing Facebook parent
The CFPB failed to show that digital payment companies subject to the agency’s “larger participant” rule posed a risk to consumers as required under the 2010 Dodd-Frank Act, TechNet and NetChoice LLC said in a complaint filed Thursday in the US District Court for the District of Columbia.
“The Bureau has sought to define a purported market for supervision without finding—in accordance with the statutory structure that focuses on consumer risk—that consumers in that market were being harmed or that there were any consumer protection risks that CFPB supervision could or would remedy, much less any that were not already being addressed by state-level supervision,” the complaint said.
Dodd-Frank, which established the CFPB, gave it the power to determine the largest participants in a consumer financial services market for direct supervision by agency examiners. The CFPB has created larger participant rules for the auto finance, debt collection, international money transfer, and other industries since it opened its doors in 2011.
The CFPB has said its larger participant rule for digital payment companies would cover the seven largest companies handling 98% of transactions.
Digital wallets such as Apple Pay and Google Pay as well as peer-to-peer payment services such as
“The CFPB’s actions create unnecessary roadblocks for businesses striving to meet consumer needs and set the stage for increased prices and reduced options,” NetChoice Director of Litigation Chris Marchese said in a statement. “America’s success in the digital payments space has been driven by innovation and competition—not heavy-handed, unlawful government interference.
CFPB Director Rohit Chopra has repeatedly raised concerns about the influence of companies such as Apple, Google, and Facebook, particularly their advertising targeting and surveillance capabilities.
TechNet said Chopra’s antipathy toward Big Tech drove the crafting of the larger participant rule, rather than data about potential risks to consumers.
“This isn’t regulation; it’s overreach and risks creating a chilling effect on innovation that drives economic growth and benefits millions of consumers,” TechNet Executive Vice President Carl Holshouser said in a statement.
The suit is the latest challenge to a high-profile CFPB rule brought by industry plaintiffs in the waning days of the Biden administration.
The CFPB declined to comment on the tech groups’ suit.
Mayer Brown LLP represents the trade association plaintiffs.
The case is Technet v. CFPB, D.D.C., No. 1:25-cv-00118, complaint filed 1/16/25.
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