Payments

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The CFPB has issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.”  Comments on the proposal are due by January 8, 2024 or by the date that is 30 days after the proposal’s publication in the Federal Register, whichever is later.… Continue Reading

Our special guest is Mark Budnitz, Professor Emeritus, Georgia State University College of Law.  In an article recently published in the Georgetown Journal on Poverty Law & Policy, Prof. Budnitz explores the impact on low-income consumers of the increasing use of digital technology for consumer payments.  Prof. Budnitz first explains why, in his view, the current laws governing digital financial services, particularly the Electronic Funds Transfer Act and Reg.… Continue Reading

Our special guest is Professor Dan Awrey of Cornell Law School. In July 2023, the Federal Reserve launched FedNow, its instant payments system. After reviewing what FedNow is (and is not), we discuss FedNow’s design features and pricing schedule, the obstacles that currently exist for usage of FedNow by community banks, and what changes can be made to increase FedNow usage by community banks. We… Continue Reading

On June 20, 2023, the Consumer Financial Protection Bureau (“CFPB”) issued its Office of Servicemember Affairs Annual Report, which analyzes consumer complaints received from servicemembers, veterans, and their families for the prior year.  This year’s report highlights an increasing number of complaints received from servicemembers regarding payment apps and the heightened risks associated with identity theft and unauthorized use for military consumers.… Continue Reading

The CFPB has issued an “Issue Spotlight” titled “Analysis of Deposit Insurance Coverage on Funds Stored Through Payment Apps.”   The report was accompanied by a consumer advisory on payment apps. 

Issue Spotlight.  To explain its focus on deposit insurance coverage of funds stored on payment apps (or P2P platforms), the CFPB points to the recent crypto asset platform collapses and bank failures and the growth of non-traditional financial services platforms. … Continue Reading

After discussing the core features of the U.S. payments systems, we look at how those features have impacted the experience of U.S. business and consumers and why Professor Awrey believes they have resulted in a payments system that is worse, more expensive, and slower than payments systems in other large, developed countries. … Continue Reading

The Wall Street Journal has reported that the seven large banks that own Zelle are discussing possible approaches to fraudulent transactions on the Zelle network.  According to the WSJ, the Zelle network rules under consideration would establish network-wide guarantees to reimburse scam victims and create liability sharing agreements, which could go live as soon as January 1, 2023. … Continue Reading

The CFPB has announced that it will be reopening the comment period on its November 2021 request for public comments to inform its inquiry into large technology companies that offer payment services.  In October 2021, the CFPB sent orders to six large technology platforms offering payment services that directed them to provide information to the Bureau about their payments products and services and their collection and use of personal payments data.… Continue Reading

I am pleased to share with our blog readers that Kristen Larson, an attorney with almost two decades of in-house experience advising midsized and large national banks on financial services matters, has joined Ballard Spahr’s Consumer Financial Services Group.  She is resident in the firm’s Minneapolis office.

Kristen’s practice involves consumer, small business, and treasury management products and services; digital banking; emerging payments; servicing; innovative technology; information security; operations; marketing; and complex service contracts.… Continue Reading