ARTICLE · 22 APRIL 2015

CFPB May Sue PayPal Over its Payment Services

Troutman Pepper Locke LLP

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On April 9, PayPal Holdings Inc. ("PayPal") issued a regulatory filing indicating that it may soon face a lawsuit from the Consumer Financial Protection Bureau.

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On April 9, PayPal Holdings Inc. ("PayPal") issued a regulatory filing indicating that it may soon face a lawsuit from the Consumer Financial Protection Bureau. The CFPB is targeting the activities of PayPal's payments service, which lets consumers buy products before paying for them. In August 2014 and January 2015, the CFPB requested documents and information related to the acquisition, management, and operation of its PayPal Credit products. The agency also sought information about PayPal's online credit services and advertising, as well as how its loans originate, how it acquires customers, and how it collects debts. According to the filing, the CFPB's Civil Investigation Demand ("CID") stated they could lead to an enforcement action and consent orders resulting in legal fees, fines, penalties, and other substantial costs.

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