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ARTICLE · 15 JANUARY 2020

PayPal Sues CFPB Over Prepaid Card Rule

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In a case that will be of interest to digital wallet providers, last month PayPal, Inc. ("PayPal") sued the Consumer Financial Protection Bureau ("CFPB") ...

United StatesTechnology
Dustin Nofziger
Dustin Nofziger
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In a case that will be of interest to digital wallet providers, last month PayPal, Inc. (“PayPal”) sued the Consumer Financial Protection Bureau (“CFPB”) in the U.S. District Court for the District of Columbia over the agency’s Prepaid Rule, which became effective on April 1, 2019 and modifies Regulation E and Regulation Z.  PayPal’s lawsuit asserts that in promulgating the Prepaid Rule, the CFPB exceeded its statutory authority and acted arbitrarily and capriciously. PayPal further asserts that the Prepaid Rule infringes upon PayPal’s First Amendment rights by requiring PayPal to make allegedly misleading and inapplicable disclosures to customers.

PayPal objects to the Prepaid Rule on five grounds.

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