Trump Signs Ricketts’ Consumer Payment CRA into Law
WASHINGTON, D.C. – Over the weekend, President Donald Trump signed a congressional review act resolution introduced by U.S. Senator Pete Ricketts (R-NE) into law. The resolution nullifies a Biden-era rule governing digital payment applications from the Consumer Financial Protection Bureau (CFPB). This CFPB rule stifled innovation and made financial transactions more difficult. Now, it will be easier for consumers to send and receive money among family and friends.
“Following their election loss, the Biden-Harris CFPB rushed an eleventh-hour rule to attack non-bank digital consumer payment applications,” said Ricketts. “I am happy President Trump signed my resolution into law to reverse this regulation and support American consumers. These are widely popular applications among consumers. President Trump is continuing to pass common sense measures by reversing this Biden-era rule.”
BACKGROUND
On November 21, 2024, the CFPB finalized a rule entitled “Defining Larger Participants of a Market for a General-Use Digital Consumer Payment Applications.” The rule was one of the Biden Administration’s many midnight rulemakings at the end of the year. Effective Jan. 9, 2025, the rule stretched CFPB’s powers to establish new supervision and examination authority. It claimed new authority over nonbank entities identified as “larger participants” in the general-use digital consumer payment applications market. These entities include payment apps, digital wallets, peer-to-peer payment apps, and other entities. “Larger participants” are entities that facilitate at least 50 million consumer payment transactions annually.
Many payment companies are already regulated at the federal and state level. Consumers are having positive experiences in engaging with these services. Despite minimal consumer complaints about payment services—accounting for only 1% of the CFPB’s 1.3 million complaints in 2023—the CFPB chose to layer additional oversight on an already well-regulated industry.
This one-size-fits-all solution in search of a problem expands CFPB’s authority without properly identifying a specific market it seeks to supervise. It fails to identify the risks within a specific market that pose harm to consumers that existing regulation doesn’t already mitigate. It also layers overreaching, duplicative regulation that could stifle innovation and lead to fewer services and increased costs. Further, the cost-benefit analysis supporting the rule is insufficient, unrealistic, and notably underestimates a CFPB exam to cost just $25,001.