12

May

2025

Congress nullifies CFPB rule on digital payment processors

Congress, exercising its power under the Congressional Review Act (CRA), officially disclaimed and effectively nullified the CFPB’s final rule establishing federal oversight over large digital payment service providers. Under the CRA, a disclaimer of an agency rule prevents the agency from passing the same or a substantially similar rule in the future.

The final rule, published December 10, 2024, required certain consumer-facing payment apps to comply with existing consumer protection laws and CFPB supervisory authority. Intended to safeguard personal data, reduce fraud, and prevent unfair account closures (sometimes referred to as “illegal debanking”), the rule defined “larger participants” in the digital payments market based on transaction volume and other objective criteria, thereby extending CFPB examination to those meeting the specified thresholds. The final rule became effective on January 9, 2025, and was officially disclaimed on May 12, 2025.

Last updated 05/21/2025.


United States (Regulatory)

History:

  • May 12, 2025: Congress passes and President Donald Trump signs into law S.J.Res. 28, nullifying the CFPB’s final rule and preventing the agency from passing the same or a substantially similar rule in the future. S.J.Res. 28, 119th Cong. (2025).

  • Dec 10, 2024: CFPB publishes its final rule in the Federal Register, formally extending its supervisory authority to large digital payment app providers and setting forth new compliance requirements. 89 Fed. Reg. 99582.

  • Jan 8, 2024: Public comment period closes, with industry stakeholders, consumer advocacy groups, and financial institutions submitting feedback on the NPRM’s proposed definitions and oversight measures.

  • Nov 17, 2023: CFPB officially issues a Notice of Proposed Rulemaking (NPRM), outlining criteria for defining “larger participants” in the digital payments market and detailing proposed supervisory requirements. 88 Fed. Reg. 99582. 

See the CRA resolution
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Tom Momberg

+17186645458 tom.momberg@dlxlaw.com

Tom advises clients in an array of matters related to blockchain technology, decentralized finance, banking and payments systems, financial products, and financial technology applications. He joined DLx Law as an attorney after working as in-house counsel for a payments and banking software service provider, advising on various legal and regulatory matters, operations, risk, customer due diligence, and corporate best practices.

Tom received his J.D. from George Mason University Law School in Virginia and his B.A. from the University of Wisconsin-Milwaukee. Tom is a former journalist, and, while in law school, he interned for DLx Law and served as a law clerk for several federal institutions in Washington, D.C., including the CFTC, FCC, and House Judiciary Committee. Tom is admitted to practice law in the District of Columbia and the State of Oregon.

Angela Angelovska-Wilson

+12023651448 angela@dlxlaw.com

Angela is an early distributed ledger technology adopter and a leading authority in the evolving global legal and regulatory landscape surrounding distributed ledger technology and smart contracts. Prior to co-founding DLx Law, Angela served as the Chief Legal & Compliance Officer of Digital Asset and was part of the founding team.

Prior to joining Digital Asset, Angela was a partner at Reed Smith where she regularly advised clients on the implementation of new technologies to finance and the complex regulatory schemes involved in the development, creation, marketing, sale and servicing of various financial services and products. Before Reed Smith, Angela spent most of her career in various roles at Latham & Watkins, where she was recognized by The Legal 500 US among the top finance attorneys in the U.S.

Angela has a deep understanding of the Fin-Tech industry and in particular the distributed ledger industry, having been involved in a number of startups in various roles, as an employee, entrepreneur and advisor. In addition to DLx Law, Angela is also co-founder of Sila Inc., an innovative technology company.