Senate Republicans Effectively Legalized Debanking

The CFPB rule took years to implement due to Wall Street opposition.

Laura Loomer in front of President Donald Trump's trial at Manhattan Criminal Court on April 15, 2024 in New York City. Photo by David Dee Delgado/Getty Images

Senate Republicans on Wednesday moved to allow payment apps like Venmo and PayPal to return to ideological debanking—repealing a rule implemented in December by the Consumer Financial Protection Bureau. The rule also required the apps to create a smooth process for dispute resolution when fraudulent activity occurs. Repeal of the rule would leave users of the apps in limbo, as the laws protecting consumers would still be in place, but the rule enforcing the law—and the bureau with the capacity to enforce it—would not.

The vote on Wednesday afternoon won the support of every Senate Republican who voted, with the exception of Josh Hawley of Missouri, who has regularly broken with his party in support of populist economic policies. The resolution to repeal the rule did not require the typical 60 votes to move forward, meaning Republicans could repeal the debanking rule with just 51 votes and without needing Democratic support.

The CFPB rule, which took years to implement due to Wall Street opposition, covers any nonbank financial institution that sees at least 50 million transactions annually and is not a small business. In other words, simply accepting payment for a service would not trigger the rule, but if the app allows money to move from one party to another—as is the case with Google Pay, Apple Pay, Zelle, and others—then the app would be required to follow the relevant laws. The company formerly known as Twitter would be covered if it added such a service, as owner Elon Musk has signaled it intends to do. The same is the case with WhatsApp, which has similarly discussed allowing users to make such transactions. Meta CEO Mark Zuckerberg and Musk—who doubles as a White House employee—fought hard for the elimination of the CFPB.

The move by Senate Republicans to repeal the debanking rule is rich, given that alleged debanking by the CFPB was a major allegation leveled by oligarchs to argue on behalf of its elimination. The CFPB does not debank consumers for ideological reasons but instead has fought the practice.

“What it's designed to do is to make sure that we aren't foreclosing to people options that are available to them,” Republican Senate Majority Leader John Thune—specifically regarding “the crypto digital assets industry.”

Sen. Deb Fischer, a Nebraska Republican who narrowly avoided being upset in 2024 by an independent populist opponent, Dan Osborn, voted to move forward on the resolution. She told Drop Site News she is not concerned that repealing the rule would lead to conservatives being debanked.

Rep. Rick Scott, who oversaw the largest Medicare fraud in American history before becoming a senator from Florida, said he would support final passage of the repeal. “I support it,” he said. “I think it makes sense. I’ve gone through each of these. We’ve got to continue to look at all these regulations.”

Asked if he was worried conservatives would be debanked, he said, “I don’t think they will be.”

Sen. John Hoeven, a Republican from North Dakota, said that he supported repeal of the rule because the CFPB had pushed its authority too far. Asked if he was worried that conservatives could be debanked as a result, he said he wasn’t sure. “I guess I'm not familiar enough with that to know to answer,” he said, an hour before the vote.

Far-right activist Laura Loomer has been banned from many online payment systems due to her politics—including PayPal, Uber, and GoFundMe. “While CFPB is often partisan, it’s not wise to throw the baby out with the bath water,” Loomer wrote on Wednesday. “Republicans are now paving the way for more debanking in America. You can oppose the ideological bias of CFPB while also not voting to repeal consumer and free speech protections when we 100% have a monopoly in our country by Big Tech companies as it relates to payment services.”

In 2021, PayPal and the Anti-Defamation League announced a joint effort to fight “extremism and hate,” which the ADL routinely defines as criticism of Israel. Debanking a consumer for criticism of Israel violates non-discrimination laws, but with the CFPB rule repealed, PayPal and the ADL would more easily be able to do so.