Google has filed a legal challenge against the US Consumer Financial Protection Bureau (CFPB), the agency responsible for overseeing consumer finance, after it placed Google Payment Corp., the company’s payment arm, under federal supervision.
The tech giant argues that the move, which the CFPB says is aimed at addressing potential consumer risks, constitutes regulatory overreach.
The CFPB’s decision
The CFPB, which enforces federal consumer financial protection laws, announced its decision to supervise Google Payment Corp last Friday. The move follows the agency’s use of a dormant legal authority revived in 2022 to oversee nonbank entities deemed to pose risks to consumers.
The CFPB said its decision was based on consumer complaints and other indicators of potential risks associated with Google Payment Corp’s operations. While the CFPB clarified that its order does not imply any wrongdoing, it allows the agency to conduct confidential examinations of the company’s compliance practices.
Google’s pushback
In response, Google’s spokesman Jose Castaneda, stated: “This is a clear case of government overreach involving Google Pay peer-to-peer payments, which never raised risks and is no longer provided in the US, and we are challenging it in court.”
The tech giant has now taken the dispute to court, challenging the agency’s authority to impose supervision.
This development marks the second time the CFPB has issued a contested supervisory designation. The agency began using its dormant oversight powers after a 2022 assessment found gaps in its supervisory programme. Companies notified of supervision can either accept the designation or contest it, as Google has done.
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