Two major tech trade groups are challenging the Consumer Financial Protection Bureau’s (CFPB) effort to treat payment apps and digital wallets like banks. In a lawsuit filed in federal court in Washington, DC, NetChoice and TechNet claim that the CFPB’s digital payment regulation, announced on November 21st, 2024, is arbitrary and capricious.

“The CFPB’s unlawful power grab undermines the rule of law, further bloats the administrative state and puts American consumers and innovation at risk,” Chris Marchese, NetChoice’s director of litigation, said in a statement. “The CFPB’s actions create unnecessary roadblocks for businesses striving to meet consumer needs and set the stage for increased prices and reduced options.”

This is the second lawsuit related to the regulation. Google filed a lawsuit in December after the CFPB placed Google Payment Corp. under federal supervision. In a statement to The Verge, Google spokesperson José Castañeda called the rule “a clear case of government overreach.”

The rule, which went into effect in late December, lets the CFPB oversee digital payment processors’ compliance with federal privacy and fraud laws through “proactive examinations.” The bureau estimated that the apps included under the rule — including Apple Pay, Google Wallet, PayPal, Venmo, and CashApp — collectively process more than 13 billion transactions a year.

But NetChoice and TechNet claim that the CFPB didn’t sufficiently identify consumer risks or gaps in oversight that would justify the rule. “The bureau failed to show that consumer risks the rule was even meant to alleviate in its haste to dream up a problem in search of a solution,” the suit claims.