Many Americans were surprised to recently see a coalition of the country’s most radical politicians — Sen. Elizabeth Warren, D-Mass., Rep Maxine Waters, D-Calif., and Sen. Richard Blumentha l, D-Conn., to name a few — teaming up to introduce heavy-handed legislation against the peer-to-peer payment companies (like PayPal, Venmo, Zelle and CashApp) that have improved all our lives. Blumenthal even went so far as to dispatch a separate letter to the head of the Consumer Financial Protection Bureau (CFPB) demanding an investigation into Zelle.
I wasn’t surprised to see any of these developments. When I served on the U.S. Congress’ Financial Services Committee, including its Subcommittee on Financial Institutions and Consumer Credit, I can’t tell you how many times I witnessed my Democratic colleagues attempt to directly or indirectly knife these upstart payment processors.
Most Americans know that big-government politicians have long had a vendetta against Bitcoin and today’s other cryptocurrencies. They, of course, view them as competition to the hegemony of the U.S. dollar, which the radical left relies upon to fund its reckless spending priorities. These progressive politicians see regulating these private marketplace options and ultimately replacing them with a government-run cryptocurrency as the only sustainable path forward.
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However, fewer Americans are aware that these same big-government politicians have also had it out for PayPal, Venmo and the rest of the peer-to-peer payment processors for quite some time now — and for quite the same reasons.
The Biden administration brass, especially CFPB Director Rohit Chopra, have fought aggressively to convince the American people to stop using PayPal, Zelle and the like as "substitutes for a traditional bank or credit union account," — which they laughingly contend present safety concerns. But their pleas haven’t fooled the American people, millions of whom continue using these new financial tools every day.
Which brings us back to the legislation introduced in July. Left with no other options to get their way other than government coercion, the administration handed the ball off to its favorite relief pitchers in Congress — Warren, Waters and Blumenthal — to reshape the nation’s laws in their favor.
The resulting new bill that this left-wing cabal released, the Protecting Consumers from Payment Scams Act, would put peer-to-peer payment processors on the hook for every single instance of scamming that occurs on their platform. Meaning that every time an American gets fooled by a bad actor into sending money for nonexistent goods and services, these companies would have to pick up the tab.
The legislation’s sponsors claim this bill is necessary to protect public safety, but everyone knows this argument is completely nonsensical. Scams don’t even comprise a single percentage point of the transactions on these platforms.
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Do consumers sometimes make mistakes? Sure, but these errors are not the result of security flaws on these apps.
The mistakes that consumers make on PayPal and Zelle are no different than when members of the citizenry occasionally send bank wire transfers to scammers, but you don’t hear the Biden administration or its congressional relief pitchers calling for the banks to pick up these tabs. Why is that?
Well, it’s because their goal for their anti-PayPal and Zelle legislation isn’t actually to protect the public.
The true purpose behind the bill is two-fold: to make it increasingly financially difficult for these companies to continue operating, and to generate negative press against their businesses in hopes of shrinking their massive user bases.
The American people won’t fall for their scare tactics, and the rest of Congress won’t either. I fully expect the Republican-led House Financial Services Committee to kill this bill before it receives even a few breaths of oxygen. Millions of everyday Americans will stand to benefit.
