Payments Pros – The Payments Law Podcast

In this episode of Payments Pros, Carlin McCrory introduces Jason Cover as a new co-host. Jason, a partner in Troutman Pepper Locke's Consumer Financial Services practice, brings extensive knowledge in consumer lending and payments laws. He advises clients on electronic payments, online small business lending, electronic consents, contracts, disclosures, and recurring payment methods. As a fintech consumer credit attorney, Jason focuses on regulatory compliance and product design, covering both federal and state laws. His insights into payment authorizations, Regulation E, and Nacha rules are invaluable.

In this episode of Payments Pros, host Carlin McCrory welcomes Jason Mikula, a seasoned fintech and banking advisor, to explore various topics within the payments industry. They begin by examining the implications of U.S. sanctions on global payment systems and the potential shift away from U.S.-controlled payment rails. The discussion then moves to the viability of pay-by-bank systems in the U.S., focusing on the challenges posed by entrenched card payment behaviors.Carlin and Jason further discuss the sustainability of nonbank fintech businesses that rely solely on interchange fees, highlighting the necessity for diversified revenue streams. The episode also covers the adoption of real-time payments like FedNow, noting the limited consumer use cases compared to commercial applications. Additionally, they explore the innovation of network flexible payment credentials and the complexities surrounding consumer understanding of new payments products. The conversation concludes with insights into new types of financial charters and the potential role of stablecoins in international payments.

In this special crossover edition of the Payments Pros and Crypto Exchange podcast, Carlin McCrory is joined by colleagues Alex Barrage and Ethan Ostroff to discuss recent legislative updates surrounding payment stablecoins. The group begins by exploring the advantages of payment stablecoins, such as their 24/7 availability and programmability, and the merits of having robust competition for stablecoin issuance and use cases.They also highlight the introduction of the Anti-CBDC Surveillance State Act and the potential for states like Wyoming to issue their own stablecoins. The discussion covers the Securities and Exchange Commission's recent statement on USD-backed stablecoins, clarifying that they do not require Securities Act registration under certain conditions. The group emphasizes the importance of a robust legislative framework to ensure stablecoin proliferation and trust, considering factors like Know Your Customer, Anti-Money Laundering, and global regulatory alignment. The episode concludes with a discussion on the future of stablecoins and the possibility of them being widely used for retail payments, contingent on effective regulation and industry trust.

In this episode of Payments Pros, host Carlin McCrory discusses a recent consent order between Patriot Bank and the Office of the Comptroller of the Currency (OCC) following a $27 million loss. The order addresses unsafe practices and legal violations, focusing on prepaid card program oversight. Key areas of concern include the need for a strategic plan, evaluation of internal operations, and staffing requirements. The bank must also enhance its Customer Identification Program (CIP) and ensure adequate monitoring of third-party program managers.Carlin discusses key takeaways from the OCC's consent order with Patriot Bank, emphasizing that other banks should maintain high compliance standards, particularly in BSA/AML programs, and tailor policies and procedures to specific business lines. She underscores the importance of thorough monitoring of fintech partners. Additionally, banks should implement robust suspicious activity reporting, conduct detailed BSA/AML risk assessments, and ensure effective internal audit coverage.

In the latest episode of Payments Pros, hosts Keith Barnett and Carlin McCrory discuss the latest FinCEN and OFAC guidance on virtual currency transactions, specifically tailored for companies in the payments industry. They explore when businesses need to register as money services businesses (MSBs) under federal law and discuss the roles of users, exchangers, and administrators of virtual currencies. Carlin provides a detailed look at the regulatory requirements for both centralized and decentralized virtual currencies.Keith then shifts the focus to OFAC's expectations for screening virtual currency transactions, emphasizing the importance of compliance with sanctions regulations. He explains the need for a risk-based OFAC sanctions compliance program to avoid prohibited transactions.This episode provides valuable insights for payments companies navigating the complex virtual currency landscape.

In the latest episode of Payments Pros, host Carlin McCrory welcomes Kim Phan to discuss the Consumer Financial Protection Bureau's (CFPB) recent inquiries into enhancing privacy protections.On January 10, the CFPB sought public input on improving privacy safeguards and curbing harmful surveillance and digital payments, particularly those offered by large technology platforms. The CFPB is particularly interested in comments on existing financial privacy laws and issues related to intrusive data collection and personalized pricing.Carlin and Kim highlight the CFPB's ongoing efforts to regulate big tech firms, which they view as operating outside traditional banking controls. The discussion also covers the CFPB's approach to the Gramm-Leach-Bliley Act (GLBA) and its effectiveness in addressing modern data surveillance.They wrap up their conversation by examining potential shifts in the CFPB's regulatory focus under new administration leadership.NOTE: At the time of recording, this podcast may not have captured the most recent events relating to the change in CFPB leadership and resulting instructions to CFPB staff regarding CFPB rulemakings. Stay tuned for future podcast episodes addressing these important developments.

In the final installment of the four-part "Payments Year in Review" series, hosts Keith Barnett and Carlin McCrory discuss significant enforcement actions and regulatory trends. The discussion begins with the increased scrutiny from the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) on bank and nonbank partnerships, emphasizing sound risk management and compliance. Key themes include third-party risk management, board governance, Bank Secrecy Act/Anti-Money Laundering compliance, and liquidity risk. The episode also addresses the proposed FDIC deposit insurance record-keeping rule.The discussion then shifts to Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) enforcement actions, highlighting more than 50 actions in 2024, many involving payment elements. The CFPB primarily targeted Regulation E violations and overdraft fees, while the FTC focused on telemarketing sales rules, chargeback rates, and returns. It is anticipated that regulatory enforcement will be lighter in 2025 due to the administration change.

In the third installment of the four-part "Payments Year in Review" series, hosts Keith Barnett, Josh McBeain, and Carlin McCrory discuss the Federal Trade Commission's (FTC) actions in 2024 and their expectations for 2025.They begin by examining amendments to the Telemarketing Sales Rule, which now includes inbound calls for technical support services. The discussion then shifts to the FTC's annual report to the Consumer Financial Protection Bureau (CFPB), highlighting enforcement activities in areas such as automobile financing, electronic fund transfers, and deceptive fees. Finally, the co-hosts review the finalized amendments to the Negative Option Rule, which impose stricter requirements on recurring subscription services across various industries. This rule mandates clear disclosures, easy cancellation processes, and prohibits misrepresentations.

In the second installment of a four-part Payments Year in Review series, Keith Barnett and Josh McBeain discuss significant developments in the payments landscape from the Consumer Financial Protection Bureau (CFPB) in 2024 and expectations for 2025.Our co-hosts continue with a discussion of the CFPB's proposed interpretive rule on earned wage access products, highlighting its broad definitions and aggressive stance on fees, which conflict with many state laws.They also discuss significant CFPB rulemakings, including the final credit card late fee rule and the overdraft rule, both of which face legal challenges. Keith and Josh close out this episode by discussing the interpretive rule on buy now, pay later transactions and the CFPB's circular on credit card rewards programs.

In the first installment of a four-part Payments Year in Review series, Keith Barnett and Carlin McCrory discuss significant developments in the payments landscape from the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) in 2024 and expectations for 2025.Our co-hosts begin with an overview of the CFPB's new rule for supervising large tech companies offering digital wallets and payment apps. Despite its finalization, and since our episode has been recorded, the rule has been challenged in the U.S. District Court for the District of Columbia.The discussion then shifts to the CFPB's final rule on personal financial data rights, aimed at enhancing consumer control over financial data. This rule includes provisions for data access, revocation, and standardized formats but may lead to increased costs for financial institutions.The episode concludes by highlighting changes to the remittance transfer rule, emphasizing the importance of accurate marketing regarding transfer speed and fees.