Our podcast show today features Professor Dan Awrey of Cornell Law School, and Matt Lambert, Deputy General Counsel of the Conference of State Bank Supervisors (“CSBS”) who discuss the pros and cons of Congress enacting a statute which would require federal charter for non-banks engaged in the payments business. At present, such non-banks are generally required to be licensed by state departments of banking under money transmitter laws.… Continue Reading
Payments
CFPB issues final rule to give bureau supervisory power over digital consumer payment applications
By Kristen E. Larson & Ronald K. Vaske on
Posted in CFPB Rulemaking, Payments
The CFPB has issued a final rule to supervise large nonbank financial services providers that offer general-use digital consumer payment applications such as digital wallets and peer-to-peer payment apps.
Many of those apps are owned by large technology companies. While banks and credit unions are subject to CFPB supervisory examinations, many of the largest technology firms offering consumer payment services have not been subject to that scrutiny, according to the CFPB.… Continue Reading
This week’s podcast episode: Should Congress Create a New Federal Charter for Non-Bank Payments Companies?
By Ballard CFS Group on
In this podcast show, we explore with our repeat guest, Professor Dan Awrey of Cornell University Law School, his working paper “Money and Federalism” in which he advocates for the enactment of Federal legislation creating a Federal charter for non-banks engaged in the payments business, like PayPal and Venmo. The article may be accessed online at SSRN and will likely be published in a law review at some time in the future.… Continue Reading
This week’s podcast episode: A close look at the Consumer Financial Protection Bureau’s proposal to supervise large nonbank providers of digital wallets and payment apps
By Barbara S. Mishkin on
Posted in CFPB Supervision, Payments
Our special guest is Brian Johnson, Managing Director of Patomak Global Partners and former CFPB Deputy Director. In November 2023, the CFPB issued a proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.” In this episode, we first discuss the CFPB’s authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services” and its previous use of that authority. … Continue Reading
Democratic Senators continue to pressure Zelle and other payment apps to change fraud policies
On February 15, 2024, Senators Sherrod Brown (D-OH), Jack Reed (D-RI) and Elizabeth Warren (D-MA) sent a letter to Zelle seeking clarification of its reimbursement policy for victims of imposter scams and urging Zelle to publicize its fraud policies to consumers and clarify whether all participating banks must reimburse eligible victims.… Continue Reading
Republican lawmakers ask CFPB to reopen comment period on proposal to supervise nonbank providers of digital wallets and payment apps
Patrick McHenry, the Republican Chair of the House Financial Services Committee, and two other Republican Committee members have sent a letter to Director Chopra regarding the CFPB’s proposed rule to supervise nonbank companies that qualify as larger participants in a market for “general-use digital consumer payment applications.”
The proposal is based on the CFPB’s authority to supervise nonbank entities considered to be “a larger participant of a market for other consumer financial products or services.” … Continue Reading
Zelle offers details on its solution to protect scammed customers
By Kristen E. Larson on
Last year, we blogged that Zelle was considering possible solutions for P2P customers on the Zelle Network who were the victims of scams. In an August 30, 2023 press release, Zelle announced that it was initiating new safety measures. It stated:
All banks and credit unions on the Zelle Network® must implement Risk Insights for Zelle®.… Continue Reading
CFPB issues proposal to supervise nonbank providers of digital wallets and payment apps
By John L. Culhane, Jr., Ronald K. Vaske, Michael Gordon, Kristen E. Larson & Ballard CFS Group on
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
This week’s podcast episode: A look at the impact of new developments in payment systems on low-income consumers
By Barbara S. Mishkin on
Posted in Payments
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
This week’s podcast episode: What is FedNow and its role in the U.S. payments system?
By Barbara S. Mishkin on
Posted in Payments
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