Many companies in the fintech space set new lobbying records in the first two quarters of 2024. From peer-to-peer money transfer apps — apps that let users borrow from their next paycheck — to “neobanks,” lobbying spending is up, and details on why are scant.

Peer-to-peer payment platforms

Peer-to-peer payment giant PayPal Inc., the owner of both PayPal and Venmo, spent over $800,000 on lobbying in the first half of 2024, outpacing its spending during the same timeframe of every prior year. 

This trend continues with the company behind CashApp, Block Inc.. Block has PayPal beat, spending just shy of $1 million on lobbying in the first half of 2024, its biggest six-month spend to date. Forbes found in a 2022 year-end survey with OnePoll that 53% of 18-25 year olds used these person-to-person payment platforms and that 50% of 26-41 year olds also used these services.

Early Warning Services, the company behind Zelle, kept its lobbying spend smaller in the first half of the year. It spent $180,000, also its biggest first six-month spend ever. Early Warning Services has also hit a new record in 2024, employing the most lobbyists they ever have with another six months of reports still to come for the year.

While several of these companies report lobbying on specific pieces of legislation, some are not so clear about these activities. The depth of these reports varies quite a bit from company to company. PayPal, for instance, reported lobbying on nine pieces of legislation, noting work of more than half of its active lobbyists on those disclosures. Others, like Block, only reported certain pieces of legislation under the bills it reportedly lobbies on while also suggesting it lobbied on others through its issue reports.

The peer-to-peer segment of the fintech industry has priorities all over the government. 

PayPal primarily lobbied on tax-related issues. Key lobbying targets include the $600 reporting threshold for goods and services transactions and the Tax Relief for American Families and Workers Act, which impacts the child tax credit as well as other areas of the tax code. It also advocated for making the qualified business income deduction from the 2017 Tax Cuts and Jobs Act permanent through the Main Street Tax Certainty Act and on marijuana banking policy.

While there are some shared issues across peer-to-peer companies, like Block also lobbying the Tax Relief Act, looking at the issues it lobbies reveals work in other areas of tech like cryptocurrency and AI. In its issue reporting, Block has listed bills its lobbying activities would most closely relate to, even if they weren’t meeting contingencies to report it as bill lobbying activity.

This isn’t the case of all peer-to-peer platforms, though. Early Warning Services, while not spending the same amount as PayPal, only reports issues they lobby on, unrelated to any one specific bill. The activities of its 10 lobbyists are covered under descriptions like “Issues related to payment systems” or “Issues related to financial services, fraud and risk management, payments, and technology,” a descriptor they’ve used to cover activities across multiple issues.

Earned income lenders

Other areas of fintech have also ramped up lobbying spending, including the companies behind apps that offer short-term loans to workers in between paychecks so they can effectively borrow from their next paycheck.

EarnIn, a financial services company that runs one of the most popular versions of this service, spent $300,000 on federal lobbying in the first half of the year — the amount that it spent over the entirety of 2023 and more than it spent during any year prior.

MoneyLion

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, another platform that offers similar services, had a similar spike. Though MoneyLion only started spending on lobbying in 2023, it has consistently spent $70,000 each quarter since the third quarter of that year.

As a part of its federal lobbying efforts, EarnIn set its sights on the Earned Wage Access Consumer Protection Act, a piece of legislation to set stricter standards for lending in this area of fintech. The House Financial Services Committee reported the legislation would “ensure consumers are not assessed mandatory or hidden fees while also mandating numerous disclosures,” and establish requirements for service providers to set up “dispute resolution procedures and certain notification requirements.”

Experts told NBC if these products were regulated like traditional loans, service providers would likely be subject to limits on the fees and “interest” they don’t currently experience while being required to provide more transparent disclosures.

The legislation has come under fire from the Center for Responsible Lending. In an open letter to Rep. Bryan Steil (R-Wis.), the sponsor behind the legislation, the Center for Responsible Lending claims that the act “would obscure the relative cost” of these advances and leave consumers to pay more. 

The Consumer Financial Protection Bureau proposed an interpretive rule in July that would “help market participants determine when certain existing requirements under Federal law are triggered.” The CFPB reports that this service area grew by over 90% from 2021 to 2022, with more than seven million borrowers taking out an average of 27 loans during the year.

“Paycheck advance products are often marketed to and designed for employers, rather than employees,” said CFPB Director Rohit Chopra in a press release. “The CFPB’s actions will help workers know what they are getting with these products and prevent race-to-the-bottom business practices.”

MoneyLion’s spending was not as straightforward. It reported that all of its lobbying activity fell under “legislation and regulation relating to consumer financial products and services,” though it did not attach it to any specific piece of legislation.

Neobanks

The biggest spike comes from the nation’s most popular “neobank,” Chime Financial, a financial technology services provider that does not hold its own FDIC insurance. FDIC insurance issued through the Federal Deposit Insurance Corporation protects up to $250,000 per depositor if a bank fails, but does not apply to some other types of holdings such as investments or crypto assets, a large portion of the services Chime provides outside of holding money. Chime describes itself as an “unbank,” partnering instead with the traditional banks Bancorp and Stride Bank, for its FDIC insurance.

Chime has already outspent the previous years’ lobbying figures in just the first six months of 2024. It spent an unprecedented $1,050,000 on lobbying in the first half of 2024. That’s just shy of what it spent in 2022 as a whole, its most expensive lobbying year to date. Chime has also employed a record 23 lobbyists in 2024, more than it ever has before.

It only reports that three of its 23 lobbyists are officially working on specific legislation, the Earned Wage Access Consumer Protection Act, while the rest are working on issue categories similar to those of Early Warning Services. Chime also reports additional lobbying on the Earned Wage Access Consumer Protection Act, just with different lobbyists than reported on the official bill report, reported as issue lobbying.

While there are other neobanks operating in the U.S., most have not reported any lobbying figures. The next largest after Chime to report lobbying figures was Varo Bank, though it has only spent $20,000 a quarter since it began lobbying at the start of 2023. Varo has not reported lobbying on any specific legislation, stating that all of its lobbying was on “matters related to digital banking.”

With about 30 legislative days left scheduled for the year in both chambers of Congress, the fate of a lot of the legislation being lobbied by the fintech sector may remain up in the air until the 119th Congress convenes. With most of the bills still in the introductory stage or stuck in committee, there is currently no timeline for when much of this legislation may reach any sort of conclusion.