The Senate voted late Wednesday to overturn a Consumer Financial Protection Bureau rule that gives the federal agency supervisory authority over big tech companies, like Google and Apple, that offer consumer payment tools.

The rule was finalized by the agency in November under the direction of CFPB Director Rohit Chopra. That was before newly elected President Donald Trump took office in January and installed CFPB Acting Director Russell Vought. It was also before the Senate shifted to Republican party control this year.

Republicans Sen. Pete Ricketts and Rep. Mike Flood, both of Nebraska, introduced the bicameral CRA resolution last week to upend the CFPB rule.

Republicans have been spooling up their efforts in Washington to reverse what they view as undue regulatory pressures. On Tuesday, the CFPB also dropped a lawsuit the agency had filed last year against the payments tool operator Zelle and some of its bank backers.

Tech trade groups had already been trying to knock down the CFPB’s rule on big tech supervision, with TechNet and NetChoice filing a lawsuit against the agency in U.S. District Court for the District of Columbia in January. There haven’t been any significant developments in the case so far, but the plaintiffs are egging on the congressional action.

“The final rule’s one-size-fits-all approach fails to follow applicable law, [and] does not identify any specific consumer harm,” TechNet Executive Vice President Carl Holshouser said in press release from Ricketts. “Instead, the Bureau casts a wide net to turn itself into a general technology regulator instead of a financial one.”

The rule gave the CFPB authority to supervise and examine nonbank technology companies that offer money transfer and digital wallet services, such as Cash App, Google Pay, Apple Pay and PayPal’s Venmo. It was necessitated partly by such tools having become commonplace, the agency said in finalizing the edict.

“The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures,” Chopra said at the time.

Fraud perpetrated on such apps was highlighted in 2022 by a New York Times feature that suggested widespread fraud was happening on the Zelle payments app operated by bank-owned company Early Warning Services. Subsequently, Senate Democrats lambasted EWS last year over consumer losses related to fraud.

Nonetheless, EWS pushed back, arguing that fraud on its system affected less than one percent of overall transactions, though it didn’t provide details.

Fintech industry trade groups, including the Financial Technology Association, that had opposed the CFPB rule also lauded the Senate’s action, contending the big tech payments players are already regulated at the state and federal levels.

Nonetheless, the consumer advocate organization Consumer Reports called the Senate vote a “major setback for consumers,” saying elimination of the rule would leave payments tool users vulnerable to monetary losses from fraud, and to digital incursions of their sensitive financial data.

In recent years, consumers have lost millions of dollars, if not billions of dollars, to scams in which they are tricked into sending money to criminals under false pretenses. Banks, payments players and consumer advocates alike have been vexed over how to combat that particular fraud. Consumer advocates say it takes an emotional toll too.

“Fraud has become increasingly common on digital payment apps and consumers have little recourse if they get tricked into sending money to scammers,” Consumer Reports Director Chuck Bell said in a Wednesday press release.

Under Chopra’s leadership starting in 2021, the agency aggressively sought to shield consumers from fraud losses, data-mining, sudden account closures and fees. Those issues were of particular concern to the agency, given a host of new digital payments tools issued by major technology companies, including Google, Apple, PayPal and Block, among others.

PayPal has offered its digital payments services for decades, but other fintech rivals, such as Block, have emerged in recent years.

When the rule was put in place, the agency noted that banks and credit unions that offer similar payments services are already subject to such supervisory authority and examinations by the CFPB.

The Senate’s vote approving the Congressional Review Act resolution was along party lines, with Republicans supporting the resolution and Democrats opposing it. The one exception was Republican Sen. Josh Hawley voting against the resolution with the Democrats. 

For the CRA resolution to take effect, the House of Representatives would have to vote for it too. It’s not clear when that vote may occur.