The move follows CFPB’s announcement that it would exercise supervisory authority over Google Payment Corp.
Google has initiated legal action against the Consumer Financial Protection Bureau (CFPB), challenging the federal agency’s decision to supervise Google Pay.
The lawsuit was filed in the US district court in Washington, DC, contests the CFPB’s authority to oversee the electronic payment service.
It follows the CFPB’s announcement that it would exercise supervisory authority over Google Payment Corp, the payment arm of Alphabet.
Google, in its lawsuit, described the CFPB’s supervision as a “burdensome form of regulation,” rooted in a “small number of unsubstantiated user complaints.”
The company also highlighted that the CFPB’s decision pertains to a peer-to-peer payment product that is no longer available in the US.
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The lawsuit stated: “As a matter of common sense, a product that no longer exists is incapable of posing such risks.”, reported CNN Business.
Google’s argument centres on what it perceives as a legal misstep by the CFPB, accusing the bureau of setting an “exceedingly low bar” for establishing sufficient risks to consumers that would justify federal oversight.
Google spokesperson José Castañeda said: “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.”
In 2022, the CFPB declared its intention to begin examining nonbank financial companies that it believes pose risks to consumers.
This supervisory notice is the second of its kind to be publicly released by the CFPB.
The CFPB has emphasised that while Google Payment Corp. is already under its enforcement jurisdiction, it meets the legal criteria for supervision, citing consumer complaints and other factors in its assessment.
In a release, CFPB also stated: “Importantly, the CFPB’s order does not constitute a finding that the entity has engaged in wrongdoing. The CFPB’s order does not require the CFPB to conduct a supervisory examination.”
Last month, CFPB that brings large nonbank companies offering digital funds transfer and payment wallet applications under its supervisory purview.
