CFPB unveils in its statement released Friday that has taken Google Inc’s payment division under its supervisory purview. In retaliation, Google went to court and sought an injunction to prevent the move.
Pervasive supervision would lead to, for example, inspections of Google in the
same manner the bureau inspects other large banks and financial companies for
possible violation of the law. Earlier this year, the CFPB concluded rules on
payments & digital wallet services regulation that fall under its
authority.
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| Google pushes back against federal supervision of its payment arm |
Even the CFPB’s announcement to designate Google recognized that Google was disputing the characterization. It explained that putting a company on supervision “does not mean the bureau has determined the supervised entity has committed misconduct,” but reveals that the company presents “ threats to consumers.”
In this case, the bureau said that there were complains of Google having not properly investigated or explained what they referred to as “allegedly erroneous transactions,” and that Google did not do enough to prevent fraud.
This comes after reports that suggested that the CFPB had been in closed doors talks with Google for several months.
As it is reported by Reuters, Google’s lawsuit stated that the CFPB was basing its action on a relatively small number of unverified complaints about Google Pay which was removed from the US market as a standalone app earlier this year.
“Google Pay peer-to-peer payments that never posed risks & is not offered in the U.S. anymore is an instance of government overreach which we are trying to fight in court,” Google spokesperson responded.
Still, its decision may also be reversed after the new leadership of the CFPB is appointed by the Donald’s Trump’s administration in January.