U.S. Senator Pete Ricketts and U.S. Representative Mike Flood have introduced a Congressional Review Act resolution aimed at overturning the Consumer Financial Protection Bureau’s (CFPB) recent rule impacting digital consumer payment companies. The legislation targets the “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications” rule, which was implemented on January 9, 2025.
Senator Ricketts criticized the CFPB’s rule as an unnecessary expansion of authority, stating: “Following their election loss, the Biden-Harris CFPB rushed an eleventh-hour rule to attack non-bank digital consumer payment applications.” He added that their proposed legislation would remove barriers to innovation and support job creators.
Representative Flood echoed these sentiments, emphasizing the importance of rolling back regulations to prevent hindrances to innovation in America’s financial technology sector. “Over the last four years, progressive activists sought to dramatically expand the regulatory authority of the Consumer Financial Protection Bureau,” he remarked.
Industry leaders also expressed concerns about the CFPB’s new regulation. Carl Holshouser from TechNet stated: “Technology helps Americans of all backgrounds manage their financial lives. The CFPB’s rule doesn’t benefit consumers or the market, but it would stifle fintech innovation.” Penny Lee from the Financial Technology Association called it an overreach by the CFPB.
The controversial rule was finalized on November 21, 2024, under what has been described as a series of midnight regulations by the outgoing administration. It aims to establish supervision over nonbank entities considered “larger participants,” such as popular payment apps like PayPal and Venmo.
Critics argue that these companies are already subject to sufficient federal and state regulations and that consumer complaints about payment services are minimal. They warn that additional oversight could hinder innovation and increase costs for consumers without providing clear benefits.
