CFPB Agrees To Halt Appeal Of PayPal Win On Digital Wallet Rule

The Consumer Financial Protection Bureau dropped its appeal in a long-running dispute with PayPal Holdings Inc. over a rule from the first Trump administration seeking to force digital wallet providers to disclose fees on a standardized form meant for prepaid cards.

The CFPB and PayPal filed a joint stipulation to dismiss the agency’s appeal of a March 2024 lower court ruling that limited the applicability of disclosure requirements in the 2019 prepaid card rule.

The move to dismiss the appeal, filed April 21 in the US Court of Appeals for the District of Columbia Circuit, is the latest instance of the CFPB under acting Director Russell Vought pulling back from litigation challenging agency rules.

PayPal and the CFPB didn’t immediately respond to requests for comment Wednesday.

The CFPB’s rule extended fee disclosures required for prepaid cards to digital wallets, even though the agency determined that most digital wallet providers don’t charge fees.

PayPal challenged the rule soon after it was finalized, arguing that digital wallets shouldn’t be covered because consumers use them to store payment card credentials to facilitate transactions.

Prepaid cards are different because they’re used to store cash and conduct transactions directly, PayPal said.

Judge Richard J. Leon of the US District Court for the District of Columbia initially ruled for PayPal in December 2020.

But the D.C. Circuit overturned Leon’s ruling in February 2023, sending the case back to the district court.

Leon ruled for PayPal again in March 2024, and the CFPB filed its appeal in May of that year.

The CFPB’s deal with PayPal came a week after it agreed to abandon an $8 credit card late fee cap in litigation with bank plaintiffs challenging that rule in the US District Court for the Northern District of Texas.

Wilmer Cutler Pickering Hale and Dorr LLP represents PayPal.

The case is PayPal Inc. v. CFPB, D.C. Cir., No. 24-05146, Joint Stipulation to Dismiss Appeal 4/21/25