Google challenges CFPB oversight of payment division in federal court

The case, brought before the US District Court in Washington, DC, argues that the CFPB's actions represent an overextension of regulatory authority. The CFPB’s decision comes from complaints related to Google’s now-discontinued peer-to-peer payment service in the United States.  

The agency cited customer reports alleging that Google mishandled cases where funds were transferred in error, potentially posing risks to consumers. The CFPB order announced supervisory authority over Google Payment Corp., which would allow the agency to conduct on-site examinations and request sensitive operational documents. 

In its lawsuit, Google asserted that the CFPB’s justification was based on a limited number of ‘unverified’ complaints. The company claimed the product’s discontinuation eliminates any potential risks to consumers, as a non-existent product cannot present risks. 

Officials from Google described the CFPB's actions as an overreach and highlighted that the peer-to-peer payments service in question had never posed risks to users before its removal from the US market.

Implications for big tech and financial regulation

The CFPB’s oversight aligns with its broader initiative to regulate nonbank financial institutions, a move it announced in 2022. CFPB officials emphasised that this authority enables the agency to pre-emptively address potential consumer harm in the evolving financial technology landscape. 

Google’s lawsuit adds to ongoing tensions between federal regulators and large technology companies, such as Apple and Samsung, which have increasingly expanded into financial products. For now, the legal challenge could test the limits of CFPB’s regulatory scope as it seeks to extend its reach into nontraditional financial services.