Washington Post reports the Consumer Financial Protection Bureau (CFPB) is moving to place Google under federal supervision, potentially subjecting the tech giant to strict monitoring similar to that imposed on financial institutions.
Two people familiar with the situation said Google resisted the move to be placed under federal supervision, setting the stage for a potential legal battle with the CFPB.
Formed after the 2008 GFC meltdown, the CFPB has broad powers to shield consumers from unfair, deceptive, or predatory financial practices. The reasons behind CFPB's potential move remain unclear, and the agency's future direction under Director Rohit Chopra faces uncertainty with President-elect Trump's return to the White House.
WaPo said:
The CFPB already conducts these inspections at large banks and credit unions, which have been subject to supervision — by other state and federal regulators — for many years. But Chopra has expressed recent alarm that the government does not always apply the same oversight to technology companies, even at a time when the financial tools they provide are similar to the bank accounts and payment systems long under close watch.
WaPo noted:
Google, for example, offers financial services including Google Wallet, which stores credit cards digitally and allows users to pay at registers with their mobile phones. (It previously offered another app, called Google Pay, which allowed U.S. users until this June to send each other cash.) Hundreds of customers have complained about Google's services in comments to the CFPB in recent years, alleging that they experienced trouble with unauthorized charges on their accounts.
...
To supervise Google, the agency must identify the company's activities as a risk to consumers. Simultaneously, the CFPB has also worked to finalize a broader set of rules that could allow it to impose supervision across the tech industry, covering not only the search giant but other large firms, including Amazon, Apple and PayPal-owned Venmo.
Meanwhile, big tech firms have lobbied against the oversight proposal and warned that the CFPB's legal authorities threaten mom-and-pop businesses.
"Digital payment apps and nonbank entities differ from banking institutions in their function, characteristics, and capabilities," the Computers & Communication Industry Association, a lobbying group for big tech firms, told the CFPB earlier this year, adding, "Hence, they should not be subject to the same supervisory authority as banks and credit unions."
