Google Sues Consumer Financial Protection Bureau

Tech giant Google has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB), contesting the agency’s recent decision to place its payments division under federal supervision.

The lawsuit, submitted Friday in a Washington, DC federal court, follows the CFPB’s declaration of supervisory authority over Google Payment Corp. The agency’s concerns were rooted in customer complaints about alleged mishandling of transactions, particularly issues where money was transferred in error. Google argues that this decision is unjustified, particularly because the peer-to-peer payment service in question is no longer available in the United States.

In its legal filing, Google called the CFPB’s decision an example of “government overreach” and described the regulatory oversight as “burdensome.” The company emphasised that the CFPB relied on a “small number of unsubstantiated user complaints” to justify its supervision.

“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,” said Google spokesperson José Castañeda in a statement.

Google’s legal team also argued that the CFPB erred in its interpretation of consumer risk, claiming the agency’s threshold for what constitutes a sufficient risk is “exceedingly low.” The lawsuit stated: “As a matter of common sense, a product that no longer exists is incapable of posing such risks.”

The CFPB, however, contends that discontinuing a product does not exempt a company from regulatory oversight. Supervisory authority allows the agency to monitor operations, ensuring compliance with consumer protection laws. This includes access to confidential records and on-site examinations.

The legal battle comes as major tech companies like Google, Apple, and Samsung increasingly expand into financial services, drawing heightened scrutiny from federal regulators. In 2022, the CFPB signalled its intent to monitor nonbank financial institutions, including fintech companies, which it believes may pose risks to consumers.

CFPB Director Rohit Chopra, in a statement at the time, said: “This authority gives us critical agility to move as quickly as the market, allowing us to conduct examinations of financial companies posing risks to consumers and stop harm before it spreads.”

The case marks a pivotal moment in the evolving relationship between big tech and federal regulators, as agencies like the CFPB assert their authority over financial products offered by technology firms.