PayPal Under SEC Investigation, Now a Target in Three Federal Probes
Fintech company under the microscope for its marketing and how it reports some marketing fees it earns.
July 29, 2021
PayPal (PYPL), a fintech firm already under federal investigation, has revealed it is now the target of two new investigations being conducted by federal regulatory agencies. In its latest 10-Q, PayPal disclosed the Consumer Financial Protection Bureau (CFPB) is investigating its credit product:

“We have received a CID from the CFPB related to the marketing and use of PayPal Credit in connection with certain merchants that provide educational services.”

In the second new probe, PayPal revealed the Securities and Exchange Commission (SEC) is looking into its debit card product:

“We have responded to subpoenas and requests for information received from the U.S. Securities and Exchange Commission Enforcement Division (“SEC”) relating to whether the interchange rates paid to the bank that issues debit cards bearing our licensed brands were consistent with Regulation II of the Board of Governors of the Federal Reserve System, and to the reporting of marketing fees earned from the Company’s branded card program.”

PayPal is already under CFPB investigation in connection with the unauthorized transfer of funds and collections processes related to Venmo, the company’s mobile money transfer product.
Related: SQ, V, MA, AXP, AFRM, MITK, DFS
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