Tech trade groups sue US regulator over push to treat payment apps like banks

TechNet and NetChoice have filed a lawsuit against the US Consumer Financial Protection Bureau (CFPB) over a new rule that expands its supervisory authority over payment apps and digital wallets. The complaint argues that the CFPB's actions create unnecessary roadblocks for businesses and that the regulator failed to identify regulatory gaps justifying its intervention. The rule targets larger non-bank companies such as Apple Pay, Google Wallet, PayPal, Venmo, and Cash App, and allows the Bureau to oversee compliance with federal privacy and fraud laws through "proactive examinations". The lawsuit was filed on the same day that the CFPB fined Cash App-parent Block Inc. over insufficient fraud protection.