Washington, D.C. —The Consumer Federation of America released the following statement ahead of a House vote on H.J. Res 64 “Disapproving the rule submitted by the Bureau of Consumer Financial Protection relating to ‘Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications.’” The Congressional Review Act (CRA)  resolution would overturn a rule authorizing the CFPB to oversee Big Tech payment platforms, allowing the agency to verify that tech companies follow the same rules as banks and credit unions. The rule was established to ensure the increasing invasion from Big Tech companies into the financial services space doesn’t lead to less privacy, more fraud, and less equal access to banking.

“Overturning this rule would simply be a gift to Big Tech – creating an exception in financial laws that they should be fully subject to,” said Ben Winters, Director of AI and Privacy for the Consumer Federation of America. “Reversing this rule advantages Mark Zuckerberg and Elon Musk while disadvantaging consumers, law enforcement, and small businesses. It’s no coincidence this vote is coming as Elon Musk plows forward in both trying to dismantle consumer protection authorities and make X Money a payment platform that should be subject to this rule.”

“If Congress reverses the payment app rule, it will put non-bank payment apps in a regulatory blind spot where their actions go unsupervised and consumers are left with no recourse except to complain to a chatbot,” said Adam Rust, director of financial services for the Consumer Federation of America. “Moreover, passage of a CRA will permanently shield payment apps from oversight, ensuring non-bank payment apps enjoy an impervious and lasting safe space for fraudsters to steal money from people.”

About the Rule:

• The rule only applies to digital payment apps handling over 50 million transactions annually.
• The most widely used products handle over 13 billion transactions annually, processing over one trillion dollars.
• The proliferation of these tools and their use in online scams, phishing attacks, and more creates additional  security and economic risks placed on the backs of unknowing consumers. 
• The rule gives the CFPB authority to supervise non-bank payment apps and digital wallet providers. Currently, functionally identical funds transfers conducted by bank payment apps are supervised – this rule levels the playing field. 
• The rule was finalized following an extensive notice-and-comment rulemaking, a lengthy and considered process that included substantial engagement from consumers, Big Tech companies, banks, and non-profit organizations.
• The Senate voted to overturn this rule earlier this month, and the rule would be nixed if the House allows it on Tuesday. 

About payment apps and digital wallets:

• Non-bank payment apps need supervision. Compared to the leading bank-to-bank funds transfer apps, PayPal’s and Cash App’s transfers resulting in fraud-related complaints were three to six times higher than the primary payment app transfer used by banks.
• In 2024, payment apps were the second most commonly used payment vehicle in transfers which resulted in fraud.
• Payment app fraud disproportionately impacts service members and their households: Unfortunately, service members are almost twice as likely as non-military households to report having a problem with a payment app. Servicemembers complained more about payment apps in 2022 than from 2013 to 2019 combined. In a 2022 survey, four out of five servicemembers reported they had been targeted by scams related to their military service or benefits, resulting in financial losses of $267 million in 2021 alone. A separate Federal Trade Commission study found that active-duty service members reported 35,533 frauds amounting to losses of $212.4 million from 2020 to 2024.

The Congressional Review Act is not a nimble and nuanced legislative tool – it is a blunt-force object. If this CRA passes, the CFPB can never present a “substantially similar” rule. The resolution’s passage makes our financial system blind in ways that cannot be reversed with a new rule. Those who view the rule unfavorably could take the step of initiating a new rulemaking process instead. To vote for this resolution is to vote against supervision of any kind. We do not know how payment fraud will evolve, but we can be confident that the passage of H.J. Res 64 will dramatically reduce our ability to prevent payment app fraud in the future.