Google sued the Consumer Financial Protection Bureau (CFPB) of overstepping its authority in supervising the company’s payment platform, Google Pay.

Payment Regulation Battle

Google filed a lawsuit in a Washington, DC, district court, challenging the CFPB’s decision to extend its supervisory reach over Google Payment Corp, the company’s payment arm. The tech giant argued that the federal agency’s decision is as it targets a discontinued peer-to-peer payment product, Reuters reported.

This marks a significant pushback against the agency’s broader effort to oversee nonbank financial companies perceived as posing risks to consumers. The CFPB, which announced its intent to supervise nonbank firms in 2022, cited consumer complaints and other factors in justifying its scrutiny of Google Payment Corp. However, Google contends that the regulatory action is unwarranted.

Google Payment sues after CFPB puts it under supervision https://t.co/GCeFtoZ649

— Yahoo Finance (@YahooFinance) December 6, 2024

Google’s argument is based on the fact that the CFPB’s decision targets a product that no longer exists. The lawsuit highlights the peer-to-peer payment feature, which Google reportedly discontinued in the United States, saying that such a service cannot pose risks to consumers.

CFPB Defends Its Supervisory Role

In its response, the CFPB reportedly emphasized that its supervisory order does not imply any findings of wrongdoing. It noted that Google Payment Corp. falls within its enforcement jurisdiction and meets the legal criteria for supervision.

The move aligns with the CFPB’s broader mission to oversee nonbank companies offering digital payment solutions. Last month, the bureau expanded its supervisory purview to include large nonbank entities managing digital funds transfers and payment wallets.

#Google to shut down #GooglePay in US, Indian users to remain unaffectedhttps://t.co/OzYb32TDzd

— Business Today (@business_today) February 25, 2024

Early this year, Google phased out Google Pay in favor of Google Wallet for its US users. The firm announced that all users would be moved to Google Wallet, with the independent Google Pay app ending on June 4.

Despite the changes, Google Pay's services in other countries, including India, were not affected by the transition. The tech giant assured users that the normal functionalities of Google Pay for online checkout and in-store payments are not affected.