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August 11, 2023

On the web

PSD3 – What Does It Mean and How Will it Advance Open Banking?

Electronic Payments International

"Whether it’s meals in the day, Neapolitan ice cream, or a game of rock, paper, scissors – the best things in life come in threes. And while payment legislation may not spring to mind when we think of important trilogies, PSD3, the European Commission’s recently proposed update to the Payment Services Directive (PSD2), is a hotly anticipated update for those in the payments space."

July 28, 2023

On the web

June 22, 2023

On the web

CUNA, AACUL, Leagues Call on Leaders to Oppose Interchange Bill


"Far from increasing credit card competition, the Marshall-Durbin-Gooden-Lofgren interchange bill would hurt consumers and small businesses while benefitting big box retailers, CUNA, the American Association of Credit Union Leagues, and all state Leagues and Associations wrote to House and Senate leaders Wednesday."

June 15, 2023

On the web

Senate Democrats Pressure PayPal, Venmo, Cash App Over Fraud Protections


"Senate Democrats on Thursday urged PayPal and Cash App to better protect users of their peer-to-peer payment applications from fraud. Sen. Sherrod Brown of Ohio, along with Massachusetts Sen. Elizabeth Warren, Rhode Island Sen. Jack Reed and New Jersey Sen. Bob Menendez, requested detailed fraud detection and prevention methods from the PayPal-owned Venmo and Cash App, which is owned by Block"

Interchange Bill ‘Cynical Manipulation’ of Payments System


"CUNA and organizations representing the entire financial services industry wrote House leaders in strong opposition of the interchange bill (H.R. 3881) introduced last week by Reps. Lance Gooden, R-Texas, and Zoe Lofgren, C-Calif. The letter follows a similar one sent by the organizations to Senate leaders last week."

June 14, 2023

On the web

May 23, 2023

On the web

MiCA is the First Step in Robust Approach to Crypto Regulation


"The Markets in Crypto-Assets regulation being introduced by the European Commission will set the benchmark for governing the global cryptoasset industry. Other jurisdictions should take note. After being proposed by the Commission in September 2020 as part of its digital finance strategy, the European Parliament finally approved the MiCA regulation on 20 April, setting the wheels in motion for it enter into force in July."

May 15, 2023

On the web

Dozens of Democrats Defend CFPB at Supreme Court as Case Threatens Its Existence


"Over 140 current and former Democratic lawmakers filed an amicus brief in the Supreme Court on Monday to defend the country’s leading consumer protection agency from challenges to its regulatory authority. The brief, led by Democrats Sen. Sherrod Brown of Ohio and Rep. Maxine Waters of California, relates to the case Consumer Financial Protection Bureau v. Community Financial Services Association of America, which would threaten the constitutionality of the agency and undermine its funding and mandated authorities."

April 13, 2023

On the web

FTC, Florida Attorney General Sue Chargebacks911 for Thwarting Consumers Who Were Trying to Reverse Disputed Credit Card Charges

Federal Trade Commission

"The Federal Trade Commission and the State of Florida have filed suit against Chargebacks911 for unfairly thwarting consumers who were trying to dispute credit card charges through the chargeback process. In a complaint filed in federal court, the FTC and Florida charged that, since at least 2016, the “chargeback mitigation” company and its owners, Gary Cardone and Monica Eaton Cardone, have used multiple unfair techniques to prevent consumers from successfully winning chargeback disputes."

Are Payment Apps Systemically Important? CFPB's Chopra Thinks So

American Banker

"Rohit Chopra, the director of the Consumer Financial Protection Bureau, has concerns about peer-to-peer payment platforms such as PayPal, Venmo and Cash App.  During a webcast appearance on Tuesday, Chopra suggested that financial regulators should consider whether such money transmitter services should be designated as systemically important to ensure their customers' funds are adequately protected. (Subscription Required)"

April 3, 2023

On the web

Italy Bans ChatGPT Over Personal Data Risk

Silicon UK

"Italy’s data regulator has blocked ChatGPT in the country and launched an investigation into the Microsoft-backed chatbot’s use of personal data. The Garante regulator said there was concern about the massive amounts of data collected by ChatGPT from its users. It said there was no legal basis to justify “the mass collection and storage of personal data for the purpose of ‘training’ the algorithms underlying the operation of the platform”. Italy is the first Western country to ban OpenAI’s ChatGPT, which is blocked in countries including China, North Korea, Iran and Russia.  The regulator noted a 20 March software bug in the chatbot that exposed portions of users’ conversations and payment information to other users for about nine hours."

March 24, 2023

On the web

Florida Governor Ron DeSantis Introduces State Legislation Banning CBDC


Florida Governor Ron DeSantis proposed legislation on Monday that would ban central bank digital currencies (CBDCs) from the Sunshine State, portraying it as a measure to safeguard Floridians’ financial privacy. The legislation would prohibit in Florida any CBDC that the U.S. Federal Reserve could introduce and any created by a foreign government, outlawing the technology entirely from being used as a form of money within the state.

March 6, 2023

On the web

Menendez, Colleagues Urge Regulators to Hold Zelle Accountable for Inadequate Protections to Stop Fraudulently Induced Payments to Crooks


"U.S. Senator Bob Menendez (D-N.J.), alongside Sens. Jack Reed (D-R.I.), Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), and Mark Warner (D-Va.), led an effort urging financial institutions and regulators to help people keep their hard-earned cash safe from fraud and scams, especially as scammers find new ways and employ sophisticated schemes to dupe customers using instant peer-to-peer payment systems like Zelle to send money on the platform under fraudulent pretenses."

March 3, 2023

On the web

Consumer Use of Buy Now, Pay Later: Insights from the CFPB Making Ends Meet Survey

Consumer Financial Protection Bureau

"This report explores the consumer financial profiles of Buy Now, Pay Later (BNPL) borrowers using the Bureau’s Making Ends Meet survey and its association with credit bureau data. While many BNPL borrowers who we observed used the product without any noticeable indications of financial stress, BNPL borrowers were, on average, much more likely to be highly indebted, revolve on their credit cards, have delinquencies in traditional credit products, and use high-interest financial services such as payday, pawn, and overdraft compared to non-BNPL borrowers."

February 24, 2023

On the web

Regulators: Banks That Offer Crypto Deposits Must Mitigate Risks

ABA Banking Journal

"Banking regulators today issued a joint statement reminding financial institutions of their risk management obligations should they offer depository services for cryptoassets. In the statement, the Federal Reserve, FDIC and the Office of the Comptroller of the Currency said that banks are neither prohibited nor discouraged from providing banking services that are permitted by law or regulation. However, “certain sources of funding from cryptoasset-related entities may pose heightened liquidity risks to banking organizations due to the unpredictability of the scale and timing of deposit inflows and outflows,” they said."

February 23, 2023

On the web

February 1, 2023

On the web

January 19, 2023

On the web

CFPB Issues Guidance to Root Out Tactics Which Charge People Fees for Subscriptions They Don’t Want

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) issued a new circular affirming that companies offering “negative option” subscription services must comply with federal consumer financial protection law. Negative option programs include subscription services that automatically renew unless the consumer affirmatively cancels, and trial marketing programs that charge a reduced fee for an initial period and then automatically begin charging a higher fee.

January 17, 2023

On the web

US Lawmakers Create 'Congress' First Ever' Digital Assets Subcommittee

Bitcoin News

U.S. Congress’ “first ever” subcommittee on digital assets has been created as part of the House Financial Services Committee. “We want to create a regulatory legal framework for digital assets … that makes America a leader from an innovation point of view but also protects consumers and investors,” explained Congressman French Hill, who will lead the digital asset subcommittee.

January 5, 2023

On the web

Why the FTC Isolated Mastercard With Its Pre-Christmas Consent Order

Digital Transactions

“When the Federal Trade Commission announced two days before Christmas it had leveled a preliminary consent order against Mastercard Inc. to correct what the agency saw as roadblocks the card company had erected against routing online debit transactions to competing networks, the move may have surprised at least some observers. The surprise lay not in what the FTC had to say, but in what it omitted: the order left out Visa Inc., Mastercard’s main rival and a company the Commission had identified only two months earlier as a fellow actor in blocking debit routing to other networks.”

January 3, 2023

On the web

Agencies Issue Joint Statement on Crypto-Asset Risks to Banking Organizations

Board of Governors of the Federal Reserve System

“Federal bank regulatory agencies today issued a statement highlighting key risks for banking organizations associated with crypto-assets and the crypto-asset sector and describing the agencies’ approaches to supervision in this area. In particular, the statement describes several key risks associated with crypto-assets and the crypto-asset sector, as demonstrated by the significant volatility and vulnerabilities over the past year. Given these risks, the agencies continue to take a careful and cautious approach related to current and proposed crypto-asset-related activities and exposures at banking organizations.”

December 23, 2022

On the web

FTC Orders an End to Illegal Mastercard Business Tactics and Requires it to Stop Blocking Competing Debit Card Payment Networks

Federal Trade Commission

“The Federal Trade Commission is ordering an end to illegal business tactics that Mastercard has been using to force merchants to route debit card payments through its payment network, and is requiring Mastercard to stop blocking the use of competing debit payment networks. Under a proposed FTC order, Mastercard will have to start providing competing networks with customer account information they need to process debit payments, reversing a practice the company allegedly had been using to keep them out of the ecommerce debit payment business and, according to the FTC, that violated provisions of the 2010 Dodd-Frank Act known as the Durbin Amendment and its implementing rule, Regulation II.”

FTC Orders Mastercard to Open Tokens to Rival Debit Networks

American Banker

“Mastercard must provide competing debit networks with the keys needed to convert tokenized card account information — which has been encoded for security purposes — back to the original account number for online transactions, the Federal Trade Commission announced on Friday. The FTC voted 4-0 to issue an administrative complaint and approve a proposed consent order alleging that Mastercard’s practices for e-commerce transactions violate provisions of the 2010 Dodd-Frank Act known as the Durbin amendment, the agency said in a press release. (Subscription required)”

December 21, 2022

On the web

CFPB Orders Wells Fargo to Pay $3.7 Billion for Widespread Mismanagement of Auto Loans, Mortgages, and Deposit Accounts

Consumer Financial Protection Bureau

“The Consumer Financial Protection Bureau (CFPB) is ordering Wells Fargo Bank to pay more than $2 billion in redress to consumers and a $1.7 billion civil penalty for legal violations across several of its largest product lines. The bank’s illegal conduct led to billions of dollars in financial harm to its customers and, for thousands of customers, the loss of their vehicles and homes. Consumers were illegally assessed fees and interest charges on auto and mortgage loans, had their cars wrongly repossessed, and had payments to auto and mortgage loans misapplied by the bank.”

December 15, 2022

On the web

FinCEN Issues Notice of Proposed Rulemaking Regarding Access to Beneficial Ownership Information and Related Safeguards


“The Financial Crimes Enforcement Network (FinCEN) today issued a Notice of Proposed Rulemaking (NPRM) that would implement provisions of the Corporate Transparency Act (CTA) that govern the access to and protection of beneficial ownership information. This NPRM proposes regulations that would govern the circumstances under which such information may be disclosed to Federal agencies; state, local, tribal, and foreign governments; and financial institutions, and how it must be protected. The proposed regulations specify how government officials would access beneficial ownership information in order to support law enforcement, national security, and intelligence activities. They also describe how certain financial institutions and their regulators would access such information in order to fulfill customer due diligence requirements and conduct supervision. The proposed rule also sets forth high standards for protecting this sensitive information consistent with the goals and requirements of the CTA. The NPRM also proposes amendments to the final reporting rule to specify when reporting companies may report FinCEN identifiers associated with entities.”

December 6, 2022

On the web

Sanctions Compliance Guidance for Instant Payment Systems

Treasury | Office of Foreign Assets Control

“In recent years, the financial sector has introduced payment systems that allow users to send and receivefunds almost instantly, at any time of the day, on any day of the year. These systems—which allow a payment’s transmission and the availability of funds to payees to occur almost in real-time (referred to herein as “instant payment systems”)1 —are being developed both in the United States and abroad. The high velocity of instant payments, along with increasing values and volumes of such payments, have led to questions across the financial sector, particularly from participating banks, about how best to implement sanctions compliance measures in this context. Each instant payment system has its own unique characteristics; for example, some allow for domestic payments only, while others permit cross-border payments. Accordingly, as the financial system innovates to improve efficiency, OFAC continues to encourage financial institutions to adopt a risk-based approach to ensure their sanctions compliance controls and related technology solutions remain commensurate with the sanctions risks presented by instant payment systems. To that end, in the context of instant payment systems, OFAC is issuing this guidance to: (i) reaffirm that financial institutions should take a risk-based approach to managing sanctions risks; (ii) highlight key factors that may be relevant in determining that risk-based approach;(iii) encourage the development and deployment of innovative sanctions compliance approaches and technologies to address identified risks; and (iv) encourage developers of instant payment systems to incorporate sanctions compliance considerations as they develop new payment technologies. This guidance should aid financial institutions in determining how best to allocate their compliance resources consistent with their particular sanctions risks.”

November 30, 2022

On the wires

Fraud, Transaction Problems Highlight US Consumer Complaints Over Crypto


“Fraud and transaction problems were leading factors in a surge of US consumer complaints related to cryptocurrencies & other digital assets. The report from the US Consumer Financial Protection Bureau (CFPB) comes as the high-profile failure of the FTX crypto exchange has seized the attention of regulators and shaken the crypto industry. “Our analysis of consumer complaints suggests that bad actors are leveraging crypto-assets to perpetrate fraud on the public,” said CFPB Director Rohit Chopra.  Even before the collapse of FTX, complaints from consumers who were hit by other types of digital currency losses have been rising at an alarming rate, the CFPB reported. The CFPB report said the crypto market has become a magnet for fraudsters who see little chance that their schemes will be detected due to the absence of investor protection and the opaque nature of the market.”

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