Google pushes back against federal supervision of its payment arm
The Consumer Financial Protection Bureau announced Friday that it was placing Google’s payment arm under federal supervision. In response, Google filed a lawsuit seeking to block the move.
Such supervision would subject Google to the same inspections that the bureau conducts with major banks and other financial institutions for potential violations of the law. The CFPB recently finalized regulations that brought payments and digital wallet services under its purview.
The CFPB’s announcement acknowledged that Google was disputing the designation. The bureau said that placing a company under supervision “does not constitute a finding that the entity has engaged in wrongdoing,” but it does indicate that the company poses “risks to consumers.”
In this case, the bureau cited complaints that Google had not adequately investigated or explained “allegedly erroneous transactions,” and that the company failed to take reasonable steps to prevent fraud.
This follows earlier reporting that the CFPB had been negotiating with Google for months.
Reuters reports that Google’s lawsuit argued that the CFPB was relying on a small number of unsubstantiated complaints about Google Pay, which was discontinued as a standalone app in the United States earlier this year.
“This is a clear case of government overreach involving Google Pay peer-to-peer payments, which never raised risks and is no longer provided in the U.S., and we are challenging it in court,” a Google spokesperson said in a statement.
Regardless of how Google’s lawsuit plays out in court, the CFPB’s decision might also be reversed after the Donald’s Trump’s presidential administration takes over in January.
