Google sues CFPB for trying to put it under state supervision

A recent report revealed that the Consumer Financial Protection Bureau (CFPB), a US financial regulator, wants to put Google under a state supervision regime. This is similar to the strict supervision that authorities exercise over banking institutions. Google’s lawsuit against the CFPB has now confirmed the news.

The report that brought the situation to light did not include specific details about the reason behind the CFPB’s intentions. However, given the government agency’s scope, one could surmise that the issue was related to a payment service. Although the first name that comes to mind is Google Wallet, it seems that the CFPB actually wants to “punish” Google for incidents with a discontinued peer-to-peer payment product.

Google’s lawsuit says CFPB is seeking a “burdensome form of regulation“

Google’s lawsuit calls the CFPB’s intentions a “burdensome form of regulation.” The company highlights the fact that the financial product is no longer even available. “As a matter of common sense, a product that no longer exists is incapable of posing such risks,” the filing reads. On the other hand, the CFPB argues that the discontinuation of the product does not relieve Google of its responsibilities.

Google issued an official statement through its spokesman José Castañeda. “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 U.S., and we are challenging it in court,” he added. The brand alleges that the CFPB is setting an “exceedingly low bar” for determining whether there is a potential risk to consumers since the decision is based on a “small number of unsubstantiated user complaints.”

So far, the CFPB has focused solely on banking institutions. If it succeeds against Google, the Mountain View giant will become the first fintech provider under state supervision. It’s noteworthy that the CFPB has long wanted to expand the scope of its powers to tech companies. “This authority gives us critical agility to move as quickly as the market, allowing us to conduct examinations of financial companies that pose risks to consumers and stop harm before they spread,” said CFPB Director Rohit Chopra in 2022.

Trump’s arrival at the White House could change things

However, the situation could change considerably once Donald Trump, the new US president, takes office. Trump and the Republican camp are against giving the CFPB more power. The new administration could even replace the director of the regulator with someone it likes. Whether Rohit Chopra succeeds in bringing Google under state supervision before the new president takes office is still up in the air. Trump’s inauguration will take place on January 20.

Google has been racking up run-ins with regulators lately. Following an unfavorable court ruling in the US, the UK is also investigating the company for monopoly over its search engine. The US DOJ wants the brand to sell Google Chrome as a solution to the monopoly situation. Plus, there is a recent controversy related to potential violation of labor laws.