Westlaw News

Paypal wins bid to strike down CFPB prepaid card regulations

A federal judge in Washington, D.C., has invalidated part of a U.S. Consumer Financial Protection Bureau rule governing prepaid cards and digital wallets, emphatically agreeing with fintech giant PayPal that the agency overstepped its authority.

In a decision studded with exclamation points, U.S. District Judge Richard Leon wrote that the agency’s rulemaking authority under Dodd–Frank Wall Street Reform and Consumer Protection Act did not allow it to dictate how prepaid card and digital wallet providers disclose fees to customers or to limit when credit cards could be linked to new accounts, saying those restrictions were precluded by other consumer finance laws.

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