The Senate has voted to overturn key regulations that granted the Consumer Financial Protection Bureau supervision over payment services operated by platforms such as PayPal, Google, and Apple.
The largely party-line 51-47 vote on Wednesday is part of a broader campaign by the Trump administration to defang the CFPB, an agency created through the landmark Dodd-Frank financial reform of 2010 and championed by progressives like Sen. Elizabeth Warren (D-Mass.) Sen. Josh Hawley (R-Mo.) was the only Republican joining Democrats in opposing the resolution.
While the legislation must still go through the House for a vote, its passage in the Senate is a key step towards reversing the Biden-era rule, which was finalized in November. It’s a key win for trade groups representing Silicon Valley, which have long criticized the CFPB, alleging the agency had overstepped by establishing its own regulatory authority over digital payment apps like Venmo and Apple Pay.
Consumer protection advocates have raised concerns about a major conflict of interest involving any rollback. Elon Musk’s social media platform X plans to enter the payments space later this year, while Musk, through the Department of Government Efficiency, is overseeing the campaign to gut the CFPB.
“Senate Republicans voted to give Elon Musk and Big Tech the ability to operate payment apps without any meaningful oversight or accountability,” the nonprofit Americans for Financial Reform said in a statement.
Silicon Valley vs. the CFPB
While other financial regulators have broad mandates to oversee complex markets like securities and commodities, Congress created the CFPB after the financial crisis to focus on consumer protection. Its mission includes combating fraud and misbehavior by financial institutions.
Still, the agency became a lightning rod, especially among Republicans. Silicon Valley joined the army of CFPB critics after the agency started using its authority to oversee nonbank companies operating in the payments space. The final rule in this process extended CFPB supervision over digital payments companies handling more than 50 million transactions annually, giving the CFPB oversight of areas like privacy, fraud, and debanking.
The CFPB has also brought a number of lawsuits against digital payments operations, including Block and Zelle.
Several Silicon Valley titans have publicly criticized the CFPB as overstepping its authority and putting an undue burden on tech companies that must comply. On a podcast with Joe Rogan last year, venture capitalist Marc Andreessen accused the agency of “terrorizing financial institutions.” After the rule about online payments was instituted in 2024, the Financial Technology Association, a trade organization representing fintech companies, issued a statement urging the CFPB to withdraw it, with the group’s CEO, Penny Lee, saying that the rule was “deeply flawed.”
The CFPB was an early target of interest for DOGE, the cost-cutting office overseen by Musk that is focused on slashing spending and cutting jobs across federal agencies. In late November, Musk tweeted “Delete CFPB,” saying that “there are too many duplicative regulatory agencies.”
After Trump appointed Treasury Secretary Scott Bessent the CFPB’s acting director in late January, Bessent ordered its staff to halt their work. Bessent’s replacement, Office of Management and Budget director Russell Vought, extended the directive. Trump’s permanent pick, Jonathan McKernan, had his nomination hearing last week.
While the Trump administration has sought widespread firings of CFPB staff and closed the agency’s headquarters, a judge has ordered a temporary pause on any mass firings within the agency. The agency’s acting director has claimed that some of the CFPB’s offices are still open, but all work within the agency has effectively been put on pause and key lawsuits dropped, including against Zelle.
Wednesday’s vote, however, represents the most severe pushback yet of the previous administration’s work, with the agency’s regulatory authority over Big Tech platforms now in limbo.
Silicon Valley groups praised the vote. “Digital payment companies are regulated at the state and federal levels," said the FTA’s Penny Lee. “Layering additional regulation simply for the sake of regulation is duplicative and burdensome and would result in increased costs for consumers and small businesses.”
Still, the rollback of the rule raises questions as to Musk’s conflict of interest, with X venturing into the payments space. In January, X CEO Linda Yaccarino said that it would launch its “X Money” service later this year, and the company shortly after announced it had struck a deal with Visa to launch a digital wallet and peer-to-peer payments service. That platform would likely reach the CFPB’s threshold of 50 million annual transactions.
A press account for X did not respond to a request for comment.
“The Republican Senate just handed Elon Musk and Big Tech a huge payday and a get out of jail free card for any future fraudulent transactions, sensitive data harvesting, and mistreatment on their platforms,” said Patrick Woodall, Americans for Financial Reform’s managing director for policy, in a statement.
Do you work at the CFPB? Have more information? Reach out via Signal to Leo Schwartz at 856-872-2064 and Jessica Mathews at 479-715-9553.
