Google Payment is Placed under Supervision with USA Regulation in Place by the Legal Suits
The U.S. agency entrusted with consumer rights protection in the financial services field, the Consumer Finance Protection Bureau (CFPB), declared on Friday the decision to bring Google Payment Corp. the payment subsidiary of Google under federal regulation because of potential risks for consumers. Such a decision was met on the part of the tech giant by an immediate legal challenge.
Concerns of Regulators
Nearly 300 complaints by consumers, most of which relate to fraud, scams, and unauthorized transactions, became part of the basis of the CFPB’s determination. While the CFPB made it clear that this determination should not be construed to mean that Google is a wrongdoer, consumer complaints seem to indicate failures on the part of the company, such as failure to investigate sufficiently complaints about erroneous transfers. It has been indicated also that federal law permits supervision even upon services that have undergone discontinuation in case consumer risks are identified.
Response of Google
In this regard, Google Payment Corp. has filed a lawsuit contesting the action of CFPB, saying that the action by the regulatory body is based only on an abysmally small number of unverified complaints about a service that the company has ceased to offer.
“As a matter of common sense, a product that no longer exists is incapable of posing such risk,” asserted Google in its court filing.
The agency has remained mum on the lawsuit.
Under Close Attention From Biden
The younger president’s focus on the financial services that tech firms provide is now underliers from the traditional banks. Recently, the agency also finished new rules requiring tech entities that provide digital wallets and payment services to comply with the same supervisory standards as banks.
CFPB, however, has persevered in continuing its rulemaking activities in the last weeks of the Biden administration notwithstanding the calls from Republican lawmakers to halt its efforts at any regulation.
Consequences of Legal Contest
As part of the federal program, this particular regulatory action and consecutive lawsuits from Silicon Valley coincide with a turning point in a struggle between federal supervision and the rapidly increasing footprint of Silicon Valley in the financial services arena. A new president is soon to take office, and the effect of this skirmish might determine the future of regulation on technology enterprises.
