Pause Play? CFPB Gaming-Related Rules on Hold

By: Michelle Cohen

Newly installed Consumer Financial Protection Bureau (“CFPB”) Director Russell Vought directed agency staff to stop work on agency matters and stay home. The future of many of the CFPB-led initiatives looks bleak, including a recent interpretive rule proposal that would treat video game publishers like payment processors.

Background

Congress created the CFPB, an independent federal agency, in 2011 in response to the financial crisis of 2007-08.  The agency oversees federal financial consumer protection laws and has jurisdiction over a wide range of entities, including mortgage lenders and brokers, student loan issuers, and other financial institutions. In 2024, the CFPB began to focus on an unlikely target – video game companies. The agency started monitoring developments in the video game industry – including what the CFPB called “gambling-like design tricks to hide the odds and encourage compulsive spending.”[1]

Just a month ago, the CFPB sought public comment on several emerging digital payment issues, including new forms of digital payments used in video gaming platforms.[2] In particular, the agency requested comments (including from video gamers and parents) on whether it should interpret the Electronic Fund Transfer Act and associated Regulation E (collectively, the “Act”) to apply to video game accounts that allow users to purchase virtual items from game developers or players. The Act provides protections for consumers who send money electronically. The proposed rule is in response to the CFPB’s concerns about unauthorized transactions, account hacks, scams, losses of assets (real and digital) and a reported lack of effective recourse from gaming companies.

As proposed, the rule could impose significant new liability and duties on these digital payment systems. This would include requiring video game companies to provide a mechanism for players to dispute payments and offer refunds to defrauded players. To date, dozens of gamers and parents submitted comments supporting the rule and further oversight of video game payment systems. Parents complained about kids’ ability to overspend on video games such as Fortnite, hacking instances, and difficulty seeking refunds and remedies from video gaming companies.

What’s Next?

With the CFPB on “time out” per Director Vought (and Elon Musk declaring the CFPB “RIP” on X), it is likely that the proposed rule will go the way of Pac Man – to the video game graveyard. Even if the CFPB were to retain some financial industry oversight, it is highly unlikely that the Trump Administration would allow the Act to be expanded to cover video game online payment systems.  A key criticism of the CFPB by the Trump Administration and Republican members of Congress has been that the agency exceeds its authority, which is to supervise “financial institutions” – not all entities taking payments.

However, if the CFPB’s possible oversight over video game payment platforms ceases, other federal (and state) agencies may enforce existing laws over game platforms. For instance, the Federal Trade Commission and state attorneys general have broad jurisdiction over deceptive and unfair business practices. In fact, the FTC has brought several cases against video game companies, including reaching a settlement in 2022 with Fortnite video game company Epic Games for more than half a billion dollars over FTC allegations of unwanted charges and privacy violations.[3] Just last month, the maker of the video game Genshin Impact agreed to pay $20 million and to block children under 16 from making in-game purchases without parental consent. The company settled FTC claims that Genshin Impact violated the COPPA privacy law and deceived children and other users about the real costs of in-game transactions and odds of obtaining rare prizes in “loot boxes.”[4]

So, even if the CFPB is, per Elon Musk, “RIP,” oversight of video game platforms and associated payment systems will live on, with other agencies continuing oversight.

[1] https://www.consumerfinance.gov/about-us/newsroom/consumer-advisory-video-games-are-targeting-your-children-to-get-into-your-wallet/.

[2] https://www.consumerfinance.gov/about-us/newsroom/cfpb-seeks-input-on-digital-payment-privacy-and-consumer-protections/.

[3] https://www.ftc.gov/news-events/news/press-releases/2022/12/fortnite-video-game-maker-epic-games-pay-more-half-billion-dollars-over-ftc-allegations.

[4] https://www.ftc.gov/news-events/news/press-releases/2025/01/genshin-impact-game-developer-will-be-banned-selling-lootboxes-teens-under-16-without-parental.