Cybersecurity Policy Report, Senate approves CRA Resolution on CFPB’s ‘Payment Apps Rule’, (Mar 6, 2025)

By Nora Macaluso

Consumer groups said repealing the CFPB’s rule would hurt consumers and benefit Elon Musk.

The U.S. Senate voted to overturn a new Consumer Financial Protection Bureau rule allowing the Bureau to supervise large nonbank companies that provide digital payment services. The Senate vote was 51-47, with two members not voting. One Republican, Josh Hawley of Missouri, joined Democrats in opposing the bill.

Sen. Pete Ricketts (R-Neb.), the bill’s sponsor, said he is “hopeful” the House will vote on a companion measure “soon.”

“It’s great to see the Senate acting first to reverse this eleventh-hour Biden administration rule that expands the Consumer Financial Protection Bureau’s authority unnecessarily,” Ricketts said. “This will be an early victory for President Trump.”

The rule, finalized in November, put the largest nonbank companies offering digital funds transfer and payment wallet apps under CFPB supervision in key areas including privacy and surveillance, errors and fraud, and debanking. The Bureau said the rule would help ensure that companies that handle more than 50 million transactions per year would follow federal law like large banks, credit unions, and other financial institutions already under CFPB supervision (see Banking and Finance Law Daily, Nov. 21, 2024).

Sen. Elizabeth Warren (D-MA), ranking Democrat on the Senate Banking Committee, warned that the vote to repeal the rule would remove protections for consumers and serve as a “get-out-of-jail-free card” for Elon Musk as he builds his digital payment platform, X Money.

“Three-quarters of Americans use digital payment platforms like Venmo and CashApp—and reports of scams on those sites have skyrocketed,” Warren said in a floor speech ahead of the vote. “So, the CFPB investigated and then stepped in with a new rule to help prevent this fraud. The CFPB’s rule also helps protect consumer privacy and it combats debanking on these platforms.”

“Elon wants to take the cop off the beat,” Warren said, adding that Musk “wasn’t very subtle when he tweeted ‘CFPB RIP.’ ”

“Republicans are setting the stage for the richest man in the world to issue his own currency that competes with the U.S. dollar,” Warren said.

Consumer groups decried the vote. “The Republican Senate just handed Elon Musk and Big Tech a huge payday and a get out of jail free card for any future fraudulent transactions, sensitive data harvesting, and mistreatment on their platforms,” said Patrick Woodall, managing director for policy at Americans for Financial Reform. The Senate, he said, “stood firmly on the side of Big Tech and against the public that will have no protections from shoddy treatment and widespread fraud on these payment apps.”

Consumer Reports called the move “a major setback for consumers.”

“We need to preserve the CFPB’s authority to conduct regular examinations of digital payment app providers to make sure they are following the law and to protect consumers from unfair practices before they become widespread,” said Chuck Bell, Consumer Reports’ advocacy program director. “Fraud has become increasingly common on digital payment apps and consumers have little recourse if they get tricked into sending money to scammers. Payment app providers collect extensive personal data from users and share that information widely with other companies, which puts consumers’ privacy at risk.”

“Elon Musk wants to cripple consumer protections for digital payment apps and the Senate is doing his bidding,” said Emily Peterson-Cassin, corporate power director at Demand Progress.

Companies: Americans Financial Reform; Consumer Reports; Demand Progress

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