The Consumer Financial Protection Bureau announced the step saying it had determined services offered by Google Payment had posed a risk to consumers.
The regulator’s step and the subsequent lawsuit marked a government tussle with a Silicon Valley behemoth in the final weeks of President Joe Biden’s administration. The regulator’s move could be reversed after President-elect Donald Trump returns to the White House in January.
Under Biden, the CFPB has been more closely scrutinizing the growing sector of financial services provided by Silicon Valley rather than traditional banks.
The agency cited nearly 300 consumer complaints, many of which concerned reports of fraud, scams and unauthorized transactions. It said it did constitute a finding that the company had engaged in wrongdoing.
The CFPB order nevertheless said consumer complaints indicated Google Payment had failed to investigate complaints about erroneous transfers, among other potential violations, and that the law allowed for supervision even if Google has discontinued the services in question.
In a lawsuit filed after the CFPB announcement, Google Payment Corp. said the regulator had relied on a small number of unsubstantiated complaints concerning a product it no longer offered.
“As a matter of common sense, a product that no longer exists is incapable of posing such risk,” the company’s complaint said.
The CFPB declined to comment on the lawsuit.
Financial regulators use confidential supervisory exams to spot and correct companies’ violations of law.
Last month, the CFPB finalized new regulations subjecting tech companies to the same supervision currently faced by banks if those companies offer digital wallets and payment services.
The agency has also persisted in rulemaking in the final weeks of Biden’s administration despite calls from Republican lawmakers to desist.
Source: Economy - investing.com
