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July 29, 2022
On the web
FTC Takes Action to Stop Payment Processor First American from Trapping Small Businesses with Surprise Exit Fees and Zombie Charges
Federal Trade Commission
“The Federal Trade Commission today took action against payment processing company First American Payment Systems and two of its sales affiliates for trapping small businesses with hidden terms, surprise exit fees, and zombie charges. The FTC alleges that the defendants made false claims about fees and cost savings to lure merchants, many of whom had limited English proficiency. Once merchants were enrolled, the defendants withdrew funds from their accounts without their consent, and made it difficult and expensive for them to cancel the service. Under a proposed federal court order, the defendants will be required to return $4.9 million to harmed businesses, stop their deception, and make it easier for merchants to cancel their services.”
What Possible Credit-Card Legislation Could Mean for Visa, Mastercard — And You
MarketWatch
“Analysts aren’t sure legislation targeting card routing would pass — but see the potential for more annual card fees and a complicated rewards landscape if it does. Credit-card companies look to be under a political microscope once again as senators announced a new bill that would target Visa Inc. and Mastercard Inc. Sen. Dick Durbin, an Illinois Democrat, and Sen. Roger Marshall, a Kansas Republican, introduced a bill Thursday that would seek to offer merchants alternate routing options when consumers pay with many Visa and Mastercard credit cards. As it stands, when consumers pay with a Visa credit card, merchants typically have to process that through the Visa network, but the Credit Card Competition Act of 2022 would require that merchants get a choice of at least two networks. This would be similar to what’s already required for most U.S. debit cards, due to the Durbin amendment that passed in the shadow of the financial crisis.”
FDIC and Federal Reserve Board Issue Letter Demanding Voyager Digital Cease and Desist From Making False or Misleading Representations of Deposit Insurance Status
Board of Governors of the Federal Reserve System
“The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board today issued a joint letter demanding that the crypto brokerage firm Voyager Digital cease and desist from making false and misleading statements regarding its FDIC deposit insurance status and take immediate action to correct any such prior statements. According to the agencies, Voyager and certain officers and employees made various statements online, including on its website, mobile app, and social media accounts, stating or suggesting that: Voyager itself is FDIC-insured; Customers who invested with the Voyager cryptocurrency platform would receive FDIC insurance coverage for all funds provided to, and held by, Voyager, without reference to the insured depository institution account; and The FDIC would insure customers against the failure of Voyager itself.”
July 28, 2022
On the web
Financial Services Industry United in Opposition to Marshall-Durbin Credit Routing Legislation
Electronic Payments Coalition
“Today, nine trade associations representing the financial services industry including the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Credit Union National Association, Electronic Payments Coalition, Independent Community Bankers of America, Mid-Sized Bank Coalition of America, National Association of Federally-Insured Credit Unions, and National Bankers Association, released the following joint statement opposing announced legislation by Senator Roger Marshall (R-KS) and Senator Dick Durbin (D-IL) creating new credit card routing mandates that fall disproportionately on card issuing credit unions and community banks:“At a time when fraud prevention, cybersecurity, and digital innovation are more critical than ever, this deeply flawed legislation from Senators Marshall and Durbin will undermine the significant safeguards and security that exist today to protect credit card payments. Retail groups want Washington to mandate that banks route credit transactions to the cheapest networks— many of which have underinvested in their platforms with little concern for security innovations— leaving the burden on consumers, small businesses, and financial institutions to clean up when things go wrong.”
Will Stablecoins Be Tethered to the Fed? Lawmakers Have Circled That Option
Coindesk
“Companies issuing stablecoins would have to deal with the Federal Reserve as the chief oversight agency, according to the current version of a bill being developed in the U.S. House of Representatives, say people familiar with the talks. While the industry is desperate for rules and supervision to settle the uncertainties that keep most investors on the sidelines, stablecoin firms would be policed by an agency that devotes much of its time trying to keep Wall Street banks on a short leash. This change would be novel for the Fed and for the nonbank crypto businesses that have never had a federal supervisor. Lawmakers in the House Financial Services Committee have found common ground on a bipartisan effort to establish stablecoin oversight in the U.S. It could mark a first step toward crypto regulation, though a few points remain to be hashed out. As it stands, naming the Fed as the government’s watchdog for stablecoin issuers is in the bill, said two people who asked not to be named because the legislation hasn’t yet been released. The details are still fluid, though, so the Fed’s role could shift.”
Apple ‘Buy Now, Pay Later’ Feature Raises Antitrust Concerns, Says US Regulator
9to5Mac
“The announcement of an Apple buy now, pay later feature, Apple Pay Later, has drawn the attention of the US consumer finance regulator, the Consumer Financial Protection Bureau (CFPB). CFPB director Rohit Chopra said that Apple Pay Later raised “a host of issues,” with antitrust concerns… The antitrust concern appears to be that Apple potentially has access to a lot of customer data in the form of Apple Pay usage, and could use that data to give itself an unfair advantage over competing BNPL services. Usage of this data also raises privacy questions. The regulator has already asked Apple to explain how the company collects and uses customer data in relation to Apple Pay generally. Similar questions have been put to Amazon, Facebook, Google, and PayPal. Finally, the CFPB is concerned that BNPL schemes increase consumer debts. These schemes are not normally considered measured as part of indebtedness due to the short-term nature of the financing, but Chopra thinks that should change.”
Visa, Mastercard Swipe Fees Targeted in Planned Senate Bill
Bloomberg
July 27, 2022
On the web
NCUA Board Issues Proposed Rule on Cyber Incident Reporting Requirements
NCUA
“Through a live webcast, the National Credit Union Administration Board held its seventh open meeting of 2022 and unanimously approved two items: A notice of proposed rulemaking on cyber incident notification requirements. A final rule to adjust the asset thresholds for assigning supervision of covered consumer credit unions to the Office of National Examinations and Supervision (ONES). The NCUA Board approved a proposed rule (opens new window) that would require a federally insured credit union (FICU) to notify the NCUA as soon as possible but no later than 72 hours after they reasonably believe that a reportable cyber incident has occurred. The NCUA Board approved a final rule(opens new window) that amends the NCUA’s regulations to change the $10 billion asset threshold for assigning federally insured credit unions to the Office of National Examinations and Supervision (ONES).”
U.S. Consumer Watchdog (CFPB) to Scrutinize Crypto Payments, Big Tech Moves Into Finance
Reuters
“The top U.S. consumer watchdog plans to scrutinize the use of cryptocurrencies for real-time payments and ramp up oversight of Big Tech companies as they expand into the traditional financial sector, its director told Reuters. The Consumer Financial Protection Bureau (CFPB) also will publish a report this fall on “buy-now, pay later” or BNPL products, and expects to propose a rule to boost consumer finance competition around early next year, Rohit Chopra said in an interview.”
July 26, 2022
On the web
House Punts on Stablecoin Bill After Yellen Raises Flags Over Key Provision
Politico
“House Financial Services Committee lawmakers will delay the markup of a widely anticipated bipartisan stablecoin bill this week after Treasury Secretary Janet Yellen pushed for changes in a key provision of the legislation. The delay will push back the timeline for when Congress could start moving stablecoin legislation until after the August recess, according to multiple sources familiar with the discussions. The move underscores Washington’s struggle to create new rules for digital asset marketplaces that have been roiled by uncertainty following the collapse of several multibillion-dollar crypto startups.”
July 21, 2022
On the web
Consumer Bureau to Push Banks to Refund More Victims of Scams on Zelle and Other Payment Services
MarketWatch
“The Consumer Financial Protection Bureau is preparing to prod banks to pay back more customers who are the victims of scams on Zelle and other money-transfer services, according to people familiar with the coming regulatory effort. Under new guidance the bureau is preparing to release in the coming weeks, banks could face heightened requirements around certain scams that have become more prevalent on these platforms, these people said, such as when a customer is tricked into sending money to a scammer pretending to be a representative of his or her bank.”
July 7, 2022
On the web
Set to Mandate PSD3 API Standardization
Business News
“Last month, the European Banking Authority (EBA) published a response to the European Commission’s call for advice on the upcoming review of the revised Payment Services Directive (PSD2). The 490 items contained within the document include a number of proposals that deal with the issue of application programming interface (API) fragmentation. According to the EBA, “experience gained in the implementation of PSD2 has shown that the absence of a single API standard has led to the emergence of different API solutions across the EU.” The report further added: “This creates significant challenges for the TPP”. [third-party service providers] Because they have to make significant effort to connect with different ASPSP. [Account Servicing Payment Service Providers’] Adapting their connection to APIs and API’s changes over time. Cutting out all the jargon, the EBA argues that API standardization is needed to reduce barriers to entry for fintechs looking to access financial account data held by banks and similar institutions.”
June 23, 2022
On the web
U.S. Consumer Watchdog to Review ‘Excessive’ Credit Card Late Payment Fees
Reuters
“The top U.S. consumer watchdog on Wednesday said it had begun a review of “excessive” credit card fees and asked card issuers for data on revenue and expenses in a bid to stamp out abuses and boost competition. The advanced notice of proposed rulemaking issued by the Consumer Financial Protection Bureau (CFPB) confirms a Reuters April report that the agency would scrutinize credit card fees as part of a broader crackdown on what it calls “junk fees,” a catch-all for overdraft, credit card late-payment fees, bounced check fees, and other charges.”
June 22, 2022
On the web
CFPB Initiates Review of Credit Card Company Penalty Policies Costing Consumers $12 Billion Each Year
Consumer Financial Protection Bureau
“The Consumer Financial Protection Bureau (CFPB) is taking the first step toward addressing credit card company penalty policies costing consumers $12 billion each year, starting by looking at excessive late fees. In an Advance Notice of Proposed Rulemaking published today, the CFPB asks for information on the Federal Reserve Board of Governors’ 2010 immunity provision for excessive late fees that allows credit card companies to escape enforcement scrutiny. The CFPB is seeking data about credit card late fees and late payments, assessing whether those fees are “reasonable and proportional.” We are also seeking data about card issuers’ revenue and expenses, the potential deterrent effect of late fees, and the role late fees play in credit card companies’ profitability.”
June 20, 2022
Top Post
Britain Plans to Regulate ‘Buy Now, Pay Later’ Lenders
Reuters
“Britain plans to make “buy now, pay later” (BNPL) companies carry out affordability checks, gain approval by the Financial Conduct Authority (FCA) and ensure adverts are fair and clear, the government said on Monday, in measures to regulate the sector. BNPL businesses, which are unregulated, typically offer interest-free short-term loans that spread payments for retail goods such as clothing and have, according to the government, rapidly increased in popularity. The government said it would publish a consultation on draft legislation towards the end of this year and would then lay secondary legislation, used to fill in the details of Acts, by mid-2023. After that, the FCA would consult on its rules for the sector, it added.”
June 14, 2022
On the web
U.S. Treasury Department on Track to Regulate Unhosted Wallets
BeInCrypto
“Following two rules proposed by the Financial Crimes Enforcement Network (FinCEN) in 2020 that enforce transaction reporting on unhosted wallet transactions exceeding $10,000, while also compelling banks to collect information on a customer and their counterparty for any transaction exceeding $3,000 involving an unhosted wallet, U.S. Deputy Treasury Secretary Wally Adeyemo affirmed that the government agency has made progress. Speaking at Consensus 2022, Adeyemo confirmed: “…we are working to address the unique risks associated with unhosted wallets…Fundamentally, financial institutions need to know who they are transacting and doing business with to make sure they are not making payments to criminals, sanctioned entities, or others. When it comes to unhosted wallets, we are working to provide them the information they need to avoid facilitating these kinds of illicit payments.””
June 8, 2022
On the web
SEC Probes Binance — BNB Could Be Unregistered Security: Report
Bitcoin.com
“The U.S. SEC is investigating whether Binance Holdings Ltd. breached securities laws when it conducted an initial coin offering (ICO) of the BNB token five years ago, Bloomberg reported Monday, citing people familiar with the matter. If the security watchdog finds that the BNB sale in 2017 was an unregistered security offering, Binance could be put in a similar position as Ripple Labs which has been in an ongoing lawsuit with the SEC over the sale of the XRP token since December 2020. The SEC claims that XRP is a security.”
June 7, 2022
On the web
Key US Senators Introduce Crypto Bill Outlining Sweeping Plan for Future Rules
Coindesk
“A wide-reaching, bipartisan crypto bill finally emerged Tuesday from U.S. Senators Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.), who are seeking to extend a comprehensive set of regulations across digital assets in the U.S. and have given industry lobbyists something meaty to debate…Their so-called Responsible Financial Innovation Act “creates regulatory clarity for agencies charged with supervising digital asset markets, provides a strong, tailored regulatory framework for stablecoins, and integrates digital assets into our existing tax and banking laws,” in the words of Lummis.”
June 3, 2022
On the web
New York Just Passed a Bill Cracking Down on Bitcoin Mining — Here’s Everything That’s in It
CNBC
“Following an early morning vote in Albany on Friday, lawmakers in New York passed a bill to ban certain bitcoin mining operations that run on carbon-based power sources. The measure now heads to the desk of Governor Kathy Hochul, who could sign it into law or veto it. If Hochul signs the bill, it would make New York the first state in the country to ban blockchain technology infrastructure, according to Perianne Boring, founder and president of the Chamber of Digital Commerce. Industry insiders also tell CNBC it could have a domino effect across the U.S., which is currently at the forefront of the global bitcoin mining industry, accounting for 38% of the world’s miners.”
June 2, 2022
On the web
Fed’s Williams: “Critical” Central Banks Understand Impact of Digital Money
Reuters
“The development of digital currency and payments technologies could change how the Federal Reserve conducts monetary policy and the composition of its balance sheet, issues the central bank will need to work to understand, New York Fed President John Williams said Wednesday. “Digital transformation could have implications for markets and for our interactions with counterparties, as well as how we carry out monetary policy,” Williams said in opening remarks to a research conference at Columbia University.”
May 27, 2022
On the web
Digital Assets and the Future of Finance: Examining the Benefits and Risks of a U.S. Central Bank Digital Currency
Board of Governors of the Federal Reserve System
“Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.: Chairwoman Waters, Ranking Member McHenry, and other members of the Committee, I [Vice Chair Lael Brainard] am pleased to join you today. With technology driving profound change, it is important we prepare for the financial system of the future and not limit our thinking to the financial system of today. No decision has been made about whether a U.S. central bank digital currency (CBDC) will be a part of that future, but it is important to undertake the necessary work to inform any such decision and to be ready to move forward should the need arise. There has been explosive growth in an emergent digital financial system built around new digital assets and facilitated by crypto-asset platforms and stablecoins as settlement assets.”
May 24, 2022
On the web
What Barclays/Lloyds Wrist Slap Means for Open Banking APIs
Fintech
“One of the promises of Open Banking was that it would level the playing field, making it possible for new entrants to compete with the banking behemoths but for that to happen there needs to be transparency. Any inaccurate information can skew the market and potentially disadvantage those that rely on that information to compete. So the news that the Competition and Markets Authority (CMA) recently reprimanded both Barclays and Lloyds for breaching the open banking provisions of the Retail Banking Market Investigation Order was significant. Open Banking relies upon APIs (Application Programming Interfaces) to share data between banks, fintechs and trusted third parties (TTPs) to create a thriving digital ecosystem but it’s down to the banks to ensure those APIs are kept up to date. In the case of Barclays, it failed to do this thirteen times between November 2018 and August 2021, by not disclosing correct fees, interest rates and failing to list 47 ATMs, among other infractions. Lloyds similarly provided incorrect information ten times from March 2017 to August 2021, from failing to update credit card interest rates and cash withdrawal charges to broken links within the APIs to the terms and conditions of three of its bank account products.”
May 10, 2022
On the web
US Treasury Secretary Janet Yellen Pushes for Stablecoin Regulation by End of Year
TechCrunch
“Stablecoins have been a hot topic both on and off Capitol Hill. Earlier today, U.S. Treasury Secretary Janet Yellen pushed for regulation during an annual testimony in front of the Senate Banking Committee, at a time where Terra’s algorithmic stablecoin UST struggles to retain its peg. “New products and technology may present opportunities to promote innovation and increase efficiencies,” Yellen said. “However, digital assets may present risks to the financial system and increased and coordinated regulatory attention is necessary.””
April 28, 2022
On the web
UK Government Publishes Approach to the Regulation of Stablecoins
Lexology
“On 4 April 2022, Her Majesty’s Treasury (the Treasury) published its response (the Response) to its consultation and call for evidence on the UK’s regulatory approach to cryptoassets, stablecoins and distributed ledger technology in financial markets (the Consultation). UK Government’s Approach to Stablecoins: Bring certain stablecoins when used as means of payment into scope of the UK’s payment services and electronic money regulatory perimeter to be supervised by the Financial Conduct Authority (FCA); Subject stablecoin issuers and service providers to the prudential supervision of the Bank of England when the stablecoins are considered systemic payment systems; and Ensure that stablecoin-based payment systems, whether systemic or not, are subject to appropriate competition regulation from the Payment Systems Regulator.”
On the wires
U.S. Consumer Chief Chopra to Revisit Rules Around Credit Card Fees, Abuses
Reuters
“The U.S. consumer watchdog will revisit its rules around credit card fees in a bid to stamp out abuses, discourage excessive late fees and boost competition, the agency’s director told Congress on Wednesday, confirming a Reuters April report. “I am asking the staff to look at whether we should reopen the CARD Act rules … to determine whether there needs to be any changes,” said Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra.”
April 26, 2022
On the web
CFPB Invokes Dormant Authority to Examine Nonbank Companies Posing Risks to Consumers
“The Consumer Financial Protection Bureau (CFPB) announced that it is invoking a largely unused legal provision to examine nonbank financial companies that pose risks to consumers. The CFPB believes that utilizing this dormant authority will help protect consumers and level the playing field between banks and nonbanks. The CFPB is also seeking public comments on a procedural rule to make this process more transparent.”
April 22, 2022
On the web
OCC Finds Anchorage Digital Failed to Maintain Proper AML Rules
Coindesk
“The Office of the Comptroller of the Currency (OCC), a federal banking regulator, and Anchorage Digital, a trust company operating with an OCC trust charter, agreed to a consent order Thursday in which the regulator said Anchorage failed to meet Bank Secrecy Act (BSA) requirements for its internal controls. According to the order , in which Anchorage neither admits nor denies the OCC’s findings, Anchorage didn’t have an anti-money laundering/Bank Secrecy Act program that met federal requirements regarding customer due diligence. The company now has 15 days to create a compliance committee where a majority of members aren’t Anchorage employees. That committee will oversee Anchorage’s compliance with the consent order.”
DIFC-based Tarabut Gateway Becomes the First Regulated Open Banking Platform in the UAE After DFSA Grants Licence
Zawya
“Tarabut Gateway has been granted a licence by Dubai Financial Services Authority (DFSA) to provide money services in and from Dubai International Financial Centre (DIFC). DFSA is the independent regulator of financial services in DIFC, the leading global financial centre in the Middle East, Africa and South Asia (MEASA) region. This licence marks the first time the DFSA has authorised a firm to provide account information services (AIS) and payment initiation services (PIS) activities. By obtaining this licence, Tarabut Gateway further cements its position in the UAE and plans to boost innovation in the sector, set new industry standards, and support the financial ecosystem”
April 21, 2022
On the web
Explainer: China UnionPay, Russia’s Potential Payments Backstop
Reuters
“Several Russian banks plan to issue payment cards that use the network of China UnionPay as well as that of home-grown payment system Mir, after Visa Inc (V.N) and MasterCard Inc (MA.N) joined other Western firms in suspending operations in Russia. read more UnionPay and Mir are among few options left for Russians to make payments abroad since Russian banks were isolated from the global financial system following Russia’s invasion of Ukraine. Russia calls its actions in Ukraine a “special operation”. read more“
April 19, 2022
On the wires
Thunes Takes Majority Stake in AML and Compliance Platform Tookitaki
Thunes
“Thunes , a Singapore-based global payments company, today announced that it has taken a majority stake in the anti-money laundering (AML) and compliance technology firm, Tookitaki Holding Pte Ltd (‘Tookitaki’) by making an investment of over $20 million. The alliance of both firms empowers the banking and financial services industry to fight money laundering and offer safe and secure payments to customers.”
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