The Fed has ruled that Pay Pal (which allows people to make and receive online payments, and is popular on E-Bay) is not a bank. That ruling doesn't affect state regulators, such as those in Louisiana, who are challenging the payment service.
PayPal has been unregulated since it began in October 1999. The company has a license to transmit money only in Oregon and West Virginia.
In mid-February, about the same time of its IPO, Louisiana asked Pay Pal to discontinue its service in the state until it receives a license from the state. Louisiana residents do not constitute a significant part of Pay Pal's customer base, but the move by the state could bode ill for the company if other states take similar action.