Senate Republicans vote to repeal rule protecting digital payment users

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

In November, the Consumer Financial Protection Bureau (CFPB) introduced a rule mandating that apps processing over 50 million transactions annually adhere to regulations similar to those imposed on large banks. This rule required the introduction of fraud protection measures and increased user control over personal data.

All Republican senators voted in favor of repealing this regulation, with the exception of Missouri Sen. Josh Hawley. No Democrats supported the move.

The CFPB estimates the most widely used payment applications facilitate over 13 billion transactions each year, predominantly for peer-to-peer payments covering expenses such as food, rent, and utilities.

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

A key aspect of the regulation prohibited payment apps from declining services to users based on their beliefs, a practice referred to as ideological debanking.

Before the rule’s implementation, several payment apps had barred far-right activists due to offensive or inflammatory statements. The CFPB regulation clarified that financial entities could refuse service only on the grounds of illegal activity, not personal views.

This decision to dismantle the rule has led to tensions between Senate Republicans and certain far-right activists. Conservative figure Laura Loomer, previously banned from PayPal for anti-Muslim rhetoric, accused Republican lawmakers of misleading their constituents.

“It’s pretty wild how Republican voters tolerate being gaslit and lied to by the GOP,” Loomer stated 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 will now require approval from the House of Representatives to take effect. A vote in the House is anticipated in the near future.