“In October 2021, the CFPB ordered six large technology and peer-to-peer platforms that operate payment services (Amazon, Apple, Facebook, Google, PayPal and Square) to provide information about their business practices, including their data collection and use, their policies for removing individuals or businesses from their platforms, and their policies and practices for adhering to key consumer protections like addressing disputes and errors. Today, the CFPB is announcing that it will re-open the public comment period for 30 days and add additional questions. Faster payment systems are increasingly popular and offer many benefits to consumers, like sending money directly to other consumers or engaging in quicker transactions. But the scale and market power of large technology companies raise concerns about potential new risks to consumers and to broader competition in the marketplace. The CFPB continues to analyze the responses to the October 2021 orders and public comments and to share our insights with the public. For example, in August, the CFPB released a report , The Convergence of Payments and Commerce, that outlined consumer risks stemming from financial services companies’ ability to aggregate and monetize consumer financial data.”

“Britain would have the power to regulate all cryptoassets under a proposal the UK financial services minister has added to a draft law before parliament that will almost certainly pass. Andrew Griffith, re-appointed as City Minister on Thursday by Britain’s new Prime Minister Rishi Sunak, put forth the amendment to the financial services and markets bill, which parliament has begun approving. The bill, as originally drafted, gives the Financial Conduct Authority powers to regulate stablecoins only, but the amendment broadens the remit to cover promotions for all cryptoassets.”

“The U.S. Consumer Financial Protection Bureau (CFPB) will move forward this week with an “open banking” rule that could dramatically boost competition in the consumer finance industry and increase Americans’ access to financial services. In a speech on Tuesday, CFPB Director Rohit Chopra said the agency expects to propose requiring financial institutions that offer transaction accounts to set up secure methods for data sharing, and will develop requirements to limit the misuse and abuse of personal financial data.”

“A code of conduct outlining best practices for “buy now, pay later” (BNPL) providers was introduced on Thursday following seven months of discussions among industry players, and will take effect on Nov 1. The code was developed by the Singapore FinTech Association (SFA) and eight industry players including Atome, Grab Financial Group and Shopback, with Monetary Authority of Singapore (MAS) guidance. It was initiated following concerns that the emerging payment option was luring people into debt, given that BNPL allows consumers to defer payment on goods or services without having to pay interest. They either repay the purchase price in one lump sum or in three to four equal instalments, usually over two to three months.”

“Acting FDIC Chairman Martin Gruenberg regards payment stablecoins as those used for mainstream real–time payments as opposed to the existing stablecoins, which are primarily used within the crypto ecosystem. At a Brookings Institute event today, he said payment stablecoins should be issued on permissioned blockchains only.  His rationale is the ability to know all the participants, including nodes and validators, to enforce sanctions and anti-money laundering compliance.  Responding to a question after his speech, he said, “A public unpermissioned blockchain poses enormous challenges in terms of basic supervisory responsibility for safety and soundness, consumer protection and anti-money laundering. The(re is) potential for a permissioned blockchain where you can address those issues. If you’re going to consider the utilization of the technology within the banking system (it) seems to us to have much greater potential.””

“Company directors could be jailed for not taking appropriate measures to prevent fraud at their organisations under proposals expected to be set out this week. MPs are due to propose an amendment to the economic crime and transparency bill which would include corporate and director-level liability for ‘failure to prevent’ criminal activity. Two all-party parliamentary groups — on fair business banking and anti-corruption and responsible tax — are supporting the amendment, which they say is necessary to put an end to the UK being a “jurisdiction of choice for dirty money”. The bill, introduced in the Commons last month, includes reforms such as changes to Companies House, the corporate registry, and greater powers for law enforcement agencies to tackle organised crime.”

“The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing “Sanctions Compliance Guidance for Instant Payment Systems” which emphasizes the importance of taking a risk-based approach to managing sanctions risks in the context of new payment technologies such as instant payment systems and to highlight considerations relevant to managing those risks. This guidance also encourages developers of instant payment systems to incorporate sanctions compliance considerations and features as they develop these systems.”

“Today, the Payment Systems Regulator (PSR) has confirmed its plans that will see around 400 more financial firms provide the name checking service, Confirmation of Payee (CoP).   CoP is an essential fraud protection measure. Today’s direction will see nearly all transactions made via Faster Payments (FPS) and CHAPS covered by CoP by October 2024. The CoP service is designed to prevent accidentally misdirected payments and APP scams by checking the name of the account holder with the account number and sort code. There are currently one million payments which benefit from the checking service every day. This latest requirement from the PSR follows a direction the regulator gave in 2019 which saw the UK’s six biggest banking groups implement the system. Since then, additional non-directed firms have voluntarily implemented the service and there are now 59 financial organisations offering CoP.”

“Retailers are mounting a last-ditch push for a bipartisan bill to crack down on credit card swipe fees paid by businesses.   Their aim is to slip the legislation into the National Defense Authorization Act (NDAA), which senators briefly discussed Tuesday, prompting alarm from financial services giants that say the bill would upend Americans’ credit card rewards.  The Credit Card Competition Act would empower merchants to choose alternative credit card networks to process payments that aren’t run by industry titans such as Visa or Mastercard — which together control around 80 percent of the U.S. market — as a way to boost competition and bring fees down.”

“U.S. senators Richard Durbin (D-Illinois) and Roger Marshall (R-Kansas) have proposed a bill known as the Credit Card Competition Act of 2022 that would force financial institutions with more than $100 billion in assets to offer merchants much more say in how credit card transactions are routed. The bill, commonly called Durbin 2.0, requires that at least two unaffiliated networks must be available, but not Visa and Mastercard together. Instead, it could be one of those networks in conjunction with either Discover or American Express. With Visa and Mastercard processing more than 80% of U.S. credit card charges, the bill’s stated intent is to promote competition in the space.”

“Banking trade groups have hit out at a plan to attach the controversial Credit Card Competition Act to the National Defense Authorization Act (NDAA). In a joint statement addressed to senior policymakers in the House of Representatives and the Senate, 10 financial services trade bodies argued that “slipping the controversial Credit Card Competition Act into the NDAA would compromise our service members’ financial safety and security just to allow big box retailers to further pad their record-breaking profits”.”

“Jerome Powell, Federal Reserve Chair, discussed the need for the approval of Congress for a digital dollar and its timing. He was talking today during a Banque de France conference. “We will need approval from both the executive branch and Congress to move ahead with a digital currency,” he said. “So we see this as a process of at least a couple of years where we’re doing work, building public confidence in our analysis, in our ultimate conclusions, which we certainly haven’t reached yet.” This could be interpreted as a decision on a central bank digital currency (CBDC) coming in two years. That makes sense because he mentioned that the FedNow instant payment system is expected to come online in around a year, which seems a little later than May to July timeframe previously mentioned. An additional year will allow time to assess the impact of FedNow on a CBDC decision.”

“Have you ever deposited a check online or received money through services like Zelle and have to wait days to see that transaction show up in your bank account? A new bill in the U.S. Congress might end that frustration. Maryland Senator Chris Van Hollen introduced the Expedited Funds Availability Act on Thursday. The legislation would require banks to make money from check deposits and other financial transactions available immediately, including on Saturdays, Sundays and Holidays.”

“Today, Representatives Peter Welch (D-VT) and Lance Gooden (R-TX) introduced the House companion to the bipartisan Credit Card Competition Act of 2022, introduced in July by Senators Dick Durbin (D-IL) and Roger Marshall, M.D. (R-KS). The legislation would finally bring needed competition and choice to the Visa-Mastercard dominated credit card network market. “Credit card companies and mega banks keep finding new ways to squeeze our small retailers in Vermont,” said Rep. Welch. “In a well-functioning market there is competition and choice. That does not exist in our current credit card network market. This bipartisan bill will correct that and bring much needed competition to the Visa-Mastercard duopoly. This long-overdue bill will help our small businesses thrive and lower household costs for families at a time when they really need it.””

“The rise of fintech services and digital banking could spur financial risks and potentially a crisis over the long term, Michael Hsu, Acting Comptroller of the Currency, a major U.S. bank regulator, warned on Wednesday. “I believe fintechs and big techs are having a large impact and warrant much more of our attention,” Hsu told a New York conference, noting the encroachment of fintech companies into the traditional financial sector, including via partnerships with banks, was creating more complexity and “de-integration” across the banking sector. “My strong sense is that this process, left to its own devices, is likely to accelerate and expand until there is a severe problem, or even a crisis,” Hsu said. Banks and tech firms, in an effort to provide a seamless customer experience, are teaming up in ways that make it more difficult for regulators to distinguish between where the bank stops and where the tech firm starts, said Hsu. And with fintech valuations falling as financing costs rise, bank partnerships with fintechs are increasing, he said.”

“After 13 years, at least three crashes, dozens of scams and Ponzi schemes and hundreds of billions of dollars made and evaporated, cryptocurrencies finally have the full attention of Congress, whose lawmakers and lobbyists have papered Capitol Hill with proposals on how to regulate the industry. The latest bipartisan proposal came Wednesday from Sens. Debbie Stabenow, D-Mich., and John Boozman, R-Ark. It would hand the regulatory authority over Bitcoin and Ether to the Commodities Futures Trading Commission. Stabenow and Boozman lead the Senate Agriculture Committee, which has authority over CTFC.”

“Leaders of a Senate committee are set to propose legislation that would assign oversight of the two largest cryptocurrencies, bitcoin and ether, to the federal agency that regulates milk futures and interest-rate swaps. Senate Agriculture Committee Chairwoman Debbie Stabenow (D., Mich.) and top-ranking Republican John Boozman of Arkansas, are planning to introduce a bill Wednesday that would empower the Commodity Futures Trading Commission to regulate spot markets for digital commodities, a newly created asset class. Currently the CFTC has authority to police derivatives, such as futures and swaps, rather than underlying commodities. (subscription required)”

Retail trade organizations have come out strongly in support of new legislation that would enable retailers and other merchants a choice of which companies process credit card transactions. The “Credit Card Competition Act of 2022,” introduced yesterday by Senators Dick Durbin (D-IL) and Roger Marshall (R-KS), if passed, promises to open up the payment processing market and remove obstacles that retailers have long maintained drive up prices for them and their customers.