TechNet has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB) in the United States Federal District Court for the District of Columbia. The suit challenges the CFPB's recent rule, which aims to extend its authority over non-bank financial technology companies. NetChoice has joined TechNet in this legal action.

Carl Holshouser, Executive Vice President of TechNet, expressed concerns about the CFPB's actions: “Instead of fostering a regulatory environment that supports responsible innovation, the CFPB is undermining the very principles that make the U.S. a global leader in financial technology.” He further stated that the rule could lead to excessive scrutiny over areas unrelated to consumer payment applications, posing risks to innovation and economic growth.

Holshouser also noted, “This action is inconsistent with the Bureau’s statutory mandate and sets a dangerous precedent that federal agencies can operate beyond the limits established by Congress.”

Chris Marchese from NetChoice added: “The CFPB’s unlawful power grab undermines the rule of law, further bloats the administrative state, and puts American consumers and innovation at risk.”

The contested rule was published by the CFPB in December. It seeks to define larger participants in markets for digital consumer payment applications but has faced opposition from various stakeholders who argue it exceeds authorized supervisory authority.

TechNet and NetChoice are represented by Mayer Brown LLP in this matter.