/regulation & compliance

News and resources on regulation, compliance, legal and governance issues for banks and fintechs.
PayPal sues CFPB over prepaid rule

PayPal sues CFPB over prepaid rule

PayPal has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB) arguing that digital wallets should be exempt from the regulator's recently introduced rule on prepaid cards.

In a suit filed in the US District Court for the District of Columbia, PayPal says the prepaid rule, introduced in April, forces it to make irrelevant disclosures that confuse customers.

Under the rule, PayPal and Venmo need to give customers "short form" fee disclosures containing categories - such as fees for ATM balance inquiries and electronic withdrawals - that are not relevant.

The suit says this has confused PayPal customers, who mistakenly think that they are being charged fees for a host of actions.

PayPal says it should not have been subjected to the rule, which is designed for providers of reloadable prepaid cards.

The suit says that the rule is a violation of the First Amendment because it forces speech, and calls for the court to vacate.

Comments: (0)

Trending Stories