Last month, the Consumer Finance Protection Bureau filed a Civil Investigative Demand (CID) against Venmo, a popular mobile finance app. The Washington Examiner recently spoke with Brad Rustin, partner and chair of Nelson Mullins’ Financial Services Regulatory practice group, to learn more about the filing and what it means for Venmo and its owner, PayPal.   

The filing states that its intent is to take an extended look at Venmo’s practices “related to Venmo’s unauthorized funds transfers and collection processes, and related matters.” Rustin told the Washington Examiner that the CID is just the beginning and that this particular case resembles a situation in which the Fair Debt Collection Practices Act would apply.

While it is difficult to predict how such a case would develop, what Rustin said he anticipates would occur in a case of the inquiry into Venmo finding sufficient evidence occurs in three stages. “First would be corrective action that compensates the consumer for whatever redresses may be required. Second is an injunction from Venmo stating it would no longer engage in these practices. Finally, Venmo would face civil monetary penalties based on the degree of harm to consumers.”