Electronic Payments

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The CFPB announced this week that it has entered into a consent order with ACI Worldwide Corp. and one of its subsidiaries, ACI Payments, Inc., in connection with more than 1.4 million erroneous electronic fund transfer payment instructions initiated by ACI through the ACH Network (ACH Entries).  In its press release, the CFPB calls the matter its “first action addressing unlawful information handling practices in processing mortgage payments.”  … Continue Reading

A group of five Democratic Senators have sent a letter to the Federal Reserve, OCC, FDIC, and NCUA asking them to take several steps to protect consumers from scams when using Zelle to transfer money.

The Senators ask the four agencies “to closely review and examine the customer reimbursement and anti-money laundering (AML) practices of depository institutions that participate in the Zelle network.”… Continue Reading

A new CFPB report, “Issue Spotlight: Public Benefits Delivery & Consumer Protection,” looks at what it describes as “the challenges that recipients of public benefits programs offering cash assistance encounter in accessing funds.”  The report focuses on cash assistance provided on prepaid cards because the CFPB has observed “specific recurring issues arising with the provision of benefits by that method.”… Continue Reading

North Dakota SB 2217, which passed the Republican-controlled state Senate and is currently pending in the House, seeks to prohibit the collection of interchange on the sales tax portion of electronic transactions. The bill would require payment card networks to:  “Deduct the amount of any tax or fee imposed from the calculation of interchange fees specific to each form or type of electronic payment transaction at the time of settlement;” or “Rebate an amount of interchange fee proportionate to the amount attributable to the tax or fee.” … Continue Reading

The American Bankers Association has sent a letter to CFPB Director Chopra in which it urges the CFPB not to shift liability to banks for peer to peer (P2P) payments using an online-money transfer platform in which the consumer who authorized the payment subsequently claims it was made to a scammer.… Continue Reading

According to a WSJ report, the CFPB is preparing to release new guidance that would require banks to make refunds to victims of scammers who defraud consumers into sending money to a third party using an online money-transfer platform.  The WSJ indicates that the CFPB’s possible action is being driven by an increase in consumer complaints to the CFPB about such scams.… Continue Reading

The CFPB has issued a compliance bulletin “to reiterate that the compulsory use prohibition in the [Electronic Fund Transfer Act (EFTA)] applies to government benefit accounts, as defined in Regulation E.”

In the bulletin, the CFPB reviews what constitutes a “government benefit account” subject to the EFTA’s compulsory use prohibition.  As implemented by Regulation E, the EFTA provides that no person may require a consumer to establish an account for receipt of an electronic fund transfer (EFT) with a particular financial institution as a condition of receipt of a government benefit. … Continue Reading

A Vermont federal district court recently issued a decision ruling on the defendants’ motion to dismiss a class action involving allegations that an online tribal lending venture violated federal and state law because of alleged usurious interest rates and other allegedly unlawful features.  The decision discusses a wide array of procedural issues, including the enforceability of the arbitration provisions in the plaintiffs’  loan agreements.… Continue Reading

The CFPB has issued a compliance bulletin (Bulletin 2015-06) concerning the Electronic Fund Transfer Act (EFTA) and Regulation E requirements for obtaining a consumer’s authorization for preauthorized electronic fund transfers (EFT) and the CFPB’s compliance expectations.  The bulletin was accompanied by the CFPB’s publication of sample letters a consumer can use in connection with preauthorized EFTs, including to revoke his or her authorization.… Continue Reading