U.S. House vote exposes more families to fraud
Media Contact: Lisa McDonald, Vice President of Communications, 202-207-2829
Washington, DC – The National Consumers League (NCL) is outraged by today’s partisan vote by the U.S. House of Representatives to repeal the Consumer Financial Protection Bureau’s (CFPB) Larger Participants Rule. The vote approving S.J. Res 28 solidifies a gaping regulatory loophole that will allow Big Tech payment apps like PayPal, Venmo, and CashApp to evade accountability for their use by criminals to defraud millions of Americans.
“Peer-to-peer payment app operators know that their platforms are being used by criminals to enable hundreds of millions, if not billions, of dollars in fraud against American families,” said NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault. “Instead of giving the CFPB the ability to crack down on this fraud, Elon Musk and his allies Congress have instead given a green light to scammers to raid the life savings of vulnerable Americans.”
The CFPB’s Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications regulation (Larger Participant Rule) last year leveled the playing field between banks and Big Tech companies by establishing much-needed CFPB oversight over operators of digital wallets and payment apps. Should S.J. Res 28 become law, the operators of these apps will also have free rein to collect vast quantities of data about individual’s transactions with few, if any guardrails.
NCL similarly criticized the House’s vote to overturn the CFPB’s overdraft fee rule (S.J. Res 18). The rule closed an outdated loophole that allows major banks to generate billions from excessive overdraft fees. Overdraft fees generate $5 billion in junk fee profits each year, costing households hit with such fees approximately $225 annually. The CFPB’s overdraft fee rule lowered overdraft fees from $35 to $5 per overdraft.
“The overdraft fee rule sent a clear message that banks should work for everyday Americans, not nickel-and-dime them with outrageous fees,” Breyault continued. “Instead of protecting this commonsense consumer protection, Republicans in Congress chose to stand with big banks and to let them continue padding their bottom lines with billions in junk fees.”
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About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.
