U.S. Senator Pete Ricketts from Nebraska announced the Senate’s approval of his Congressional Review Act resolution, which aims to reverse a recent regulation by the Consumer Financial Protection Bureau (CFPB). The rule in question, titled “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications,” became effective on January 9, 2025.
Ricketts introduced the resolution last week, targeting what he describes as an unnecessary expansion of CFPB’s authority under the Biden administration. On the Senate floor, Ricketts stated, “It’s great to see the Senate acting first to reverse this eleventh-hour Biden administration rule that expands the Consumer Financial Protection Bureau’s authority unnecessarily.” He expressed optimism about its prospects in the House and mentioned Congressman Mike Flood as a leading figure there.
The CFPB rule was finalized on November 21, 2024. It extends supervision and examination powers over nonbank entities categorized as “larger participants” in the digital consumer payment applications market. These include entities such as payment apps and digital wallets that process at least 50 million consumer transactions annually.
According to Ricketts, many companies within this sector are already subject to federal and state regulations. Despite representing only 1% of CFPB’s complaints in 2023, these services are facing additional oversight. Critics argue that this regulation is overly broad and may hinder innovation while increasing costs for consumers.
The cost-benefit analysis backing this rule has been criticized for being insufficient and unrealistic. Notably, it estimates a CFPB exam cost at just $25,001.
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