Consumer protection in the US has seen a major change as the House voted to repeal a rule from the Consumer Financial Protection Bureau (CFPB) that placed Big Tech firms under its supervision.
The Senate passed a similar repeal resolution in March, meaning that it will now be up to President Donald Trump to overturn the ruling.
Chuck Bell, Advocacy Programme Director at Consumer Reports, said: “By voting to repeal the CFPB’s rule, Congress is turning a blind eye to the fraud that runs rampant on payment apps and the privacy risks users can face when big tech companies collect their sensitive financial data and share it widely with other companies.
“Today’s vote weakens the CFPB’s ability to stop unfair practices that put consumers who use payment apps at risk and ensure that big tech companies are following the law.”
Launched last November, the rule in question allows the CFPB to oversee digital payment apps operated by Big Tech companies. The Bureau believed this would bring them in line with the standards already applied to large banks, credit unions and other supervised financial institutions.
One of the main reasons behind the rule was the rapid growth of large-scale apps in recent years that have adopted native digital wallets and their increasing importance to consumers. The watchdog pointed out that the most popular apps covered by the rule process over 13 billion consumer payment transactions every year.
The rule targeted seven non-bank companies, including payment platforms from Apple, Google and Amazon, as well as fintech firms like PayPal and Block, and peer-to-peer services such as Venmo and Zelle.
At the time, then-CFPB Director Rohit Chopra stated: “Digital payments have gone from novelty to necessity and our oversight must reflect this reality. The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures.”
Backers of the rollback
Since Trump returned to the White House, many rulings have been overturned over concerns that they could stifle growth and innovation. Republican Representative Mike Flood emphasised the same sentiment on X, stating: “Rolling back this regulation is critical to ensuring the CFPB doesn’t become a barrier to innovation.”
This view is also shared by Elon Musk, who, while not directly voting on these repeals, has been an outspoken critic of the CFPB and this rule in particular. His stance isn’t surprising, given his public plans to launch a payments division on his own social media platform X.
Musk has also played a significant role in shaping changes at the CFPB, leveraging his influence as a key figure in the Department of Government Efficiency.
