Fast payments Industry Must Adapt to Evolving CFPB Policy

by Sarah Grotta 0

In early July, the Consumer Financial Protection Bureau (CFPB) released an announcement indicating their interest in shaping how faster payments are developed and ultimately delivered to consumers, and issued a list of guidelines for those involved in the development. The list was high level and included recommendations that the solution be secure, have good fraud controls and not deceive consumers, all things the industry can and will support. Questions lingered for many what the details and intent behind this list might really mean. As pointed out in Lexology, the CFPB has broad powers and regulation of faster payments could impact anyone in the payment value chain:

The CFPB has broad enforcement jurisdiction over businesses that violate federal consumer financial laws. Because most regulations are behind the rapidly developing innovations in the payment systems space, the CFPB will likely wield its flexible unfair, deceptive, and abusive acts and practices (UDAAP) authority to regulate fintech businesses. That authority covers any entity that offers or provides a consumer financial product or service.
Further advice was given to look at recent enforcement actions the CFPB has taken to get some insight on how the CFPB might take its high – level concepts to enforcement action:
…. the CFPB sued a group of companies that allegedly harassed consumers to collect phantom debts. The lawsuit notably named payment processors and telemarketing companies that provided services to the debt collectors. The CFPB’s theory is that “by enabling the debt collectors to accept payment by credit and debit card, the payment processors helped to legitimize the collectors’ business and facilitated millions of dollars in ill-gotten profits.”

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

Read the full story

Featured Content