Google sues CFPB over payment arm supervision

Google has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB), challenging the United States agency’s decision to place Google Pay under its regulatory oversight. The legal action, submitted in a Washington, D.C., federal court, disputes the CFPB’s authority to supervise Google Payment Corp., a subsidiary of Alphabet.

In its complaint, Google described the CFPB's move as an "overreach," citing it as based on a limited number of user complaints. The company argued that the supervision pertains to a peer-to-peer payment product that is no longer available in the U.S., asserting that such a product poses no risks to consumers. "A product that no longer exists cannot create risks warranting federal oversight," Google stated in its filing.

Google spokesperson José Castañeda labelled the supervision an unnecessary regulatory burden, saying, “This is government overreach targeting a defunct Google Pay peer-to-peer payment product, which posed no risks. We are contesting this in court.”

The CFPB began extending its oversight to nonbank financial companies in 2022, focusing on entities deemed to present risks to consumers. Google Payment Corp. became one of the few publicly named companies under this expanded supervision. The agency justified its decision by citing consumer complaints and other risk indicators but clarified that its order does not imply the company has committed any wrongdoing or require immediate examinations.

This case highlights tensions between technology companies and regulatory agencies as oversight of digital payment systems expands. The CFPB has emphasized that its efforts are aimed at ensuring consumer safety amid the growing influence of nonbank payment providers. However, Google’s legal challenge suggests a broader debate over the limits of federal supervision in a rapidly evolving financial technology landscape.