The Consumer Financial Protection Bureau announced Friday that it is placing Google’s payments division under federal supervision. In response, Google filed a lawsuit to block the move.
Such oversight would subject Google to the same inspections the agency conducts of major banks and other financial institutions for possible violations of the law. The CFPB recently finalized regulations that bring payments and digital wallet services under its purview.
The CFPB’s announcement acknowledged that Google disputed the designation. According to the agency, placing a company under supervision “is the case.” not constitute a finding that the entity has engaged in misconduct,” but it does indicate that the company poses “risks to consumers.”
In this case, the agency cited complaints that Google had failed to adequately investigate or explain “allegedly erroneous transactions,” and that the company had failed to take reasonable steps to prevent fraud.
This follows previous reports that the CFPB had been negotiating with Google for months.
Reuters reports that Google’s lawsuit argued that the CFPB relied on a small number of unsubstantiated complaints about Google Pay, which was discontinued as a standalone app in the United States earlier this year.
“This is a clear case of government overreach with peer-to-peer payments through Google Pay, which never posed any risks and is no longer offered in the US, and we are challenging this in court,” a Google spokesperson said in a statement.
Regardless of how Google’s lawsuit plays out in court, the CFPB’s decision could also be reversed after Donald Trump’s presidential administration takes over in January.
