House Republicans Pass Bill Letting Musk 'Fleece Consumers' With His X Money Scheme

In a move likely to further enrich Elon Musk, the world's richest person, the Republican-controlled U.S. House of Representatives on Wednesday voted to revoke a rule empowering a federal agency to oversee digital payment applications including Apple Pay, CashApp, and Venmo like it monitors banks and credit card companies.

House lawmakers passed S.J. Res. 28 by a party-line vote of 219-211, a move that followed the Senate's vote last month to rescind the Consumer Financial Protect Bureau (CFPB) rule requiring payment apps to be regulated under the agency's supervisory authority.

"The vote," the progressive advocacy group Demand Progress said, "is the latest in a damning and telling chain of events benefiting Elon Musk," chairman of the social media company X.

The group laid out the timeline:

• November 21, 2024: The CFPB finalizes a rule enabling the agency to proactively supervise digital payment apps.
• November 27, 2024: Musk tweets "Delete CFPB."
• January 28, 2025: X CEO announces that X Money will debut with a partnership with Visa.
• February 7, 2025: Musk's Department of Government Efficiency staffers enter the CFPB and kick off an effort to shut it down.
• March 5, 2025: The Senate votes to revoke the CFPB's digital payments rule.
• April 9, 2025: The House of Representatives votes to revoke the rule.

"Musk is now on a glide path to launch X Money this year without the watchdog agency to ensure that he follows federal rules mandating data security standards, disputes for fraudulent payments, consumer protections against debanking, and more," Demand Progress said.

"And through the so-called Department of Government Efficiency, Musk now has access to sensitive information about competitors in the digital payments space like Cash App, PayPal, and Venmo that have been investigated by the CFPB, potentially giving X Money an unfair business advantage," the group added.

As Consumer Reportsnoted Wednesday:

The CFPB's rule (also known as the larger participant rule) applies to digital wallet and payment providers handling more than 50 million transactions per year. The most widely used apps subject to the rule process an estimated 13 billion consumer payment transactions annually, according to the CFPB.

In 2023 alone, consumers reported losing $210 million to scams on peer-to-peer payment apps, a staggering 62% increase from 2021. In addition, users who accidentally send a payment to the wrong person find it nearly impossible to get their money back.

"Elon Musk orchestrated a plan to rip off consumers with impunity when he tweeted 'Delete CFPB' and Congress just rubber-stamped it. Today's shameful vote means that X, an app already swarming with bots and scammers, will be able to connect to your bank account and allow fraudsters to take your money without accountability," Emily Peterson-Cassin, corporate power director at Demand Progress, said Wednesday.

"Thanks to the CFPB's supervision, $120 million was refunded to consumers who were scammed through Cash App," Peterson-Cassin added. "That kind of policing will be significantly harder now that Congress has voted to strip the CFPB of its ability to proactively watch over payment apps. And thanks to DOGE's intrusions into the CFPB's databases, Musk now has access to sensitive financial data from companies investigated by the agency, including virtually all would-be competitors to X Money in the digital payments space."

Other consumer advocates also panned the House vote, with Consumer Reports advocacy program director Chuck Bell arguing that "by voting to repeal the CFPB's rule, Congress is turning a blind eye to the fraud that runs rampant on payment apps and the privacy risks users can face when Big Tech companies collect their sensitive financial data and share it widely with other companies."

"Today's vote weakens the CFPB's ability to stop unfair practices that put consumers who use payment apps at risk and ensure that Big Tech companies are following the law," Bell added.