/>iOn February 8, the CFPB requested a 90 day stay in a lawsuit filed by a major tech company challenging the agency’s risk-based supervision order. The lawsuit, filed in the U.S. District Court for the District of Columbia, contests an order issued in late 2024 by former CFPB Director Rohit Chopra that would subject the tech company’s payment services activities to the Bureau’s supervisory oversight. The CFPB’s request was granted on February 9, pausing litigation until May.
The December 2024 supervision order (which we previously discussed here) designated the nonbank financial services provider for risk-based supervision, citing potential risks related to digital payment transactions. As part of its oversight order, the CFPB expressed concerns in connection with how the entity handled user-reported payment errors and fraud claims. In response, the entity challenged the order, arguing that the CFPB cannot assert supervisory authority over a discontinued product and alleging that the agency’s decision was based on selectively chosen evidence and an overly broad risk standard.
Under the stay, the CFPB’s new Acting Director Russell Vought will review the supervision order and may rescind or modify it. During this period, the CFPB will not exercise supervisory authority over the company and is required to provide a status report in May when the stay expires.
Putting It Into Practice: The CFPB’s decision to pause the supervision order aligns with a broader regulatory pullback under the agency’s new Trump-appointed leadership, and marks a departure from its assertive stance on Big Tech under former Director Rohit Chopra.
