Senate GOP Votes to Repeal Rule Protecting Digital Payment App Users

Senate Republicans Move to Repeal Rule on Electronic Payment Apps

On March 5, Senate Republicans voted to dismantle a rule designed to protect users of electronic payment platforms such as PayPal and Venmo.

The Consumer Financial Protection Bureau (CFPB) had finalized a rule in November, which required digital payment apps with over 50 million transactions annually to adhere to regulations similar to those for large banks. This rule mandated the implementation of fraud protection measures and increased user control over personal data.

Missouri Sen. Josh Hawley was the sole Republican senator who opposed the repeal, while no Democrats supported the repeal effort.

According to CFPB estimates, the leading payment apps handle upwards of 13 billion transactions each year. These transactions are primarily peer-to-peer payments for everyday expenses such as food, rent, and utilities.

CFPB Director Rohit Chopra remarked in December, “Digital payments have gone from novelty to necessity and our oversight must reflect this reality. The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures.”

The rule also included a provision preventing payment apps from denying services based on customers’ beliefs, a practice known as ideological debanking.

Before the rule’s implementation, several apps had banned far-right activists for expressing offensive or inflammatory views. The CFPB clarified that service denial should be based on illegal conduct rather than speech.

The repeal has caused tension between Senate Republicans and some far-right activists. Conservative figures, such as Laura Loomer, who faced a ban from PayPal for anti-Muslim rhetoric, criticized Republican senators for “gaslighting” their constituents.

“It’s pretty wild how Republican voters tolerate being gaslit and lied to by the GOP,” Loomer commented on X. “We were told that debanking would not be tolerated in our Golden Age. But, today, every single Republican Senator with the exception of @HawleyMO voted to repeal a Consumer Financial Protection Bureau (CFPB) rule that bans debanking over political affiliation or ideology.”

The Senate’s decision now awaits approval from the House of Representatives, with a vote anticipated in the coming weeks.