Google has filed a lawsuit against the US Consumer Financial Protection Bureau (CFPB) challenging an order for federal supervision of Google Payment Corp., its financial services division. Google argues the order constitutes government overreach.
CFPB's Rationale
The CFPB's order grants the agency the authority to conduct regular examinations to ensure Google's compliance with consumer financial laws. The bureau cited concerns regarding allegedly erroneous transactions and insufficient fraud prevention measures in Google Pay and Google Pay Balance as justification for the supervision.
Although the CFPB acknowledged the discontinuation of the Google Pay app in February 2024 and the limited functionality of Google Pay Balance, they still deemed supervision necessary.
Google's Argument
In its lawsuit, Google contends that because Google Pay peer-to-peer payments are no longer offered in the US, the product is incapable of posing the risks cited by the CFPB. A Google spokesperson stated, "This is a clear case of government overreach...and we are challenging it in court."
The outcome of this legal battle will have significant implications for fintech regulation and the extent of government oversight in the financial technology sector.
