PayPal vs. Consumers?

Payments giant sues Consumer Bureau

Andy Spears
2 min readMar 24, 2022


Photo by Rami Al-zayat on Unsplash

American Banker reports that payments giant PayPal is taking on the Consumer Financial Protection Bureau (CFPB) in a lawsuit that could have far-reaching implications in the fintech industry.

American Banker notes:

The online payments giant sued the CFPB in 2019, claiming digital wallets should not be subject to the same fee disclosures as prepaid cards because they are inherently different products. A ruling in favor of PayPal could limit the CFPB’s authority under the Dodd-Frank Act to mandate and prescribe consumer disclosures, experts said.

Brian Tate, president and CEO of the Innovative Payments Association, an industry trade group, called the PayPal lawsuit “one of the most important and least-covered stories in payments, depending on which way the court rules. … This case has the potential to have a huge impact on the marketplace.”

The move by PayPal comes as a newly energized CFPB under Biden appointee Rohit Chopra is seeking greater authority in the fintech space:

According to American Banker:

From a practical standpoint, if the appeals court sides with PayPal, the short-form disclosure for prepaid accounts would be thrown out, gutting an important provision of the CFPB’s prepaid rule that was eight years in the making.

PayPal’s Venmo service is currently under investigation by the CFPB for unauthorized transfers. PayPal is also facing a potential class action lawsuit related to its “PayPal Pay in 4” product — a Buy Now, Pay Later service.

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Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .