Payments Pros – The Payments Law Podcast

In the second and final installment of our two-part Payments Year in Review series, Keith Barnett, Carlin McCrory, and Josh McBeain continue their discussion around the payments landscape of 2023 and their predictions for 2024.In this episode, our co-hosts discuss the CFPB and FTC's attempts to regulate negative options, the Federal Reserve's FedNow, the adoption of Money Transmission Modernization Act in several states, Nacha's proposed risk management framework for credit push fraud, and state legislation concerning Earned Wage Access.More information about 2023 regulatory developments can be found in our 2023 Payments Year in Review. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In the first installment of a two-part Payments Year in Review series, Keith Barnett, Carlin McCrory, and Josh McBeain delve into the payments landscape of 2023 and share their predictions for 2024.Our co-hosts discuss the Consumer Financial Protection Bureau's (CFPB) proposed rule to supervise "larger participants" in the market for general-use digital consumer payment applications. They also examine the CFPB's report on complaints about payment app fraud, their statements on add-on fees and fees associated with requests for account information, as well as their efforts to reduce credit card late fees. Not to be left out of the party, they also discuss the Federal Trade Commission's (FTC) proposed new rule aimed at prohibiting "junk fees." This is a can't miss episode for anyone looking to catch up on federal payments issues in 2023.More information about 2023 regulatory developments can be found in our 2023 Payments Year in Review. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In this episode of Payments Pros, Keith Barnett is joined by James Stevens to discuss the Merchant Acquirer Limited Purpose Bank Charter (MALPB) in Georgia, a unique charter that allows companies to offer merchant payment processing services without a sponsoring partner bank. Despite being enacted 12 years ago, companies have been unable to utilize it due to card networks not allowing direct participation. This could change soon, especially with Fiserv's recent application.Keith and James note that MALPB is limited to merchant activities and has specific rules regarding merchant funds. The application process is rigorous, involving a detailed review of owners, officers, and directors. The charter also requires the company to employ at least 50 Georgia residents and to engage in merchant acquiring activities within a year of receiving the charter.The Georgia Department of Banking and Finance, which regulates traditional banks in Georgia and will regulate these MALPBs, has posted some guidance and an application form. The guidance is particularly helpful, providing robust capital requirements for these charters.The conversation wraps up with Keith and James emphasizing that the charter's value hinges on the card networks' access allowance. Troutman Pepper, having played a key role in drafting the MALPB law and having a wealth of experience in securing bank charters, is ideally positioned to guide applicants. Our team has been involved in the establishment of all banks formed in the state of Georgia since 2010. James underscores the importance for applicants to seek advice from attorneys and consultants with a proven track record of successfully filing and obtaining bank charters in Georgia. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In this episode of Payments Pros, Keith Barnett and Carlin McCrory are joined by Jordan Wright, CEO of Atomic Financial, to discuss the Consumer Financial Protection Bureau's (CFPB) proposed 1033 rule. This rule aims to limit the misuse or sale of consumer data, and is expected to be finalized by summer 2024.Jordan highlights the importance of data portability in banking, comparing it the telecommunications industry's phone number portability. He suggests that the rule will increase competition, forcing banks to offer better services to retain customers.The proposed 1033 rule requires financial institutions, starting with the largest, to make consumer data, including bill pay data, accessible to third parties and consumers. This may necessitate significant architectural changes and costs, but ensures consumers' legal right to share their data without incurring unnecessary fees.The discussion concludes with Jordan forecasting that the proposed 1033 rule will enhance banking services by fostering competition and simplifying the process for customers to switch banks. He foresees the emergence of earned wage access products as a tool to assist individuals in better financial management. Additionally, Jordan supports the secondary use of data for personalized financial advice and advocates for the rule's extension to encompass payroll and merchant data. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In this episode of Payments Pros, Keith Barnett and Carlin McCrory discuss the Consumer Financial Protection Bureau's (CFPB) fall supervisory highlights, focusing on "junk fees." The report covers examinations in areas of deposits, auto servicing, and remittances completed between February and August 2023. The recent report reveals that their efforts have resulted in institutions refunding more than $140 million to consumers. The report primarily focuses on deposits as an area of supervisory observations.Keith and Carlin also note that the report discusses CFPB identifying unfair practices by financial institutions, which have been charging consumers representment nonsufficient funds (NSF) fees without providing an opportunity to prevent additional fees after the first failed attempt. According to the CFPB, some institutions have used incomplete data that failed to capture all instances of representment NSF fees charged to consumers. The CFPB is currently seeking comprehensive reporting on when consumers were charged multiple representment fees and ensuring proper reimbursement. As noted in the report, institutions are refunding more than $22 million to consumers in response to these directives. NSF fees have been a particular point of criticism for the CFPB, arguing that they are too high and are charged without providing a service to the consumer. Therefore, institutions have been urged by the CFPB to eliminate NSF fees.The report also addresses unanticipated overdraft fees and the CFPB's findings on pandemic relief benefits. The CFPB obtained data from several institutions related to the fees assessed over the course of 2022.Lastly, Keith and Carlin discuss that the CFPB has identified unfair practices related to auto servicers' handling of refunds and add-on products after loans terminate early. Some servicers failed to ensure consumers receive refunds, while others miscalculated refund amounts. The CFPB found that servicers engaged in unfair practices when they miscalculated add-on product refund amounts after loans terminated early. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Carlin McCrory, digital consumer payment expert, joins a special joint episode to discuss the CFPB's proposed larger participant rule for consumer payments providers. The group discusses the implications of the rule, including increased enforcement activity and the broad scope. The rule is expected to be finalized and become effective around fall 2024.

In this episode of Payments Pros, Keith Barnett and Carlin McCrory are joined by Pidgin's Senior Vice President of Innovation Kevin Olsen to discuss faster payments and the FedNow service.Faster payments, such as real-time payments (RTP) and FedNow, are transactions completed in seconds, available 24/7, and restricted to U.S. financial institutions. Since its launch in July 2023, FedNow has seen rapid adoption due to its public nature and industrywide development. Kevin highlights various use cases for FedNow, including person-to-person, account-to-account, and business transactions, as well as potential government and emergency uses.Kevin and the Payments Pros hosts also discuss how financial institutions and fintechs can access FedNow, the onboarding process, and the areas in which faster payments can be improved. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

This episode of Payments Pros spotlights an episode from The Crypto Exchange, where Kalama Lui-Kwan joins Payments Pros hosts Keith Barnett and Carlin McCrory to discuss consumer protection under Regulation E. They delve into a July 2022 letter from Democratic senators, urging the CFPB to hold banks liable for consumer losses when the consumers provide alleged fraudsters with access to their own accounts through payment apps. Keith and Carlin examine the senators' concerns and the potential significant impact on financial institutions from any changes that the CFPB makes. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In the latest episode of Payments Pros, hosts Keith Barnett and Carlin McCrory are joined by Jean Gonnell and Agustin Rodriguez, co-leaders of Troutman Pepper’s Cannabis practice, to discuss the legal complexities that financial institutions face when dealing with the cannabis industry.Jean and Agustin give a high-level overview of the basics of cannabis, including federal and state regulations, and the specific expectations for financial institutions operating in this space. They also explain the rigorous state-level regulatory systems for marijuana, including seed-to-sale tracking, testing requirements, and security measures.Our guests examine the impact of cannabis regulation on financial institutions. They discuss the challenges posed by the Bank Secrecy Act, money transmitter laws, and the Money Laundering Control Act for financial institutions serving marijuana-related businesses.Our Cannabis Practice provides advice on issues related to applicable federal and state law. Marijuana remains an illegal controlled substance under federal law. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

In the latest episode of Payments Pros, hosts Keith Barnett, Josh McBeain, and Carlin McCrory discuss Earned Wage Access (EWA), a system that allows employees to receive their earned wages before the employer's payroll cycle.Keith, Josh, and Carlin delve into the potentially applicable federal laws related to EWA, starting with the Truth in Lending Act (TILA). They discuss the Consumer Financial Protection Bureau's (CFPB) advisory opinion on EWA products and the confusion it caused in the industry. They also discuss other federal laws that may apply to EWA products, such as the Equal Credit Opportunity Act (ECOA), the Military Lending Act (MLA), Regulation E, and the Payday Lending Rule.In addition to the federal laws, Keith, Josh, and Carlin discuss state lending and licensing laws, and highlight recent state EWA laws and regulatory activity related to EWA, including laws passed in Missouri and Nevada, advisory opinions issued in Arizona and Maryland, and EWA activity in California.Finally, the group also discusses enforcement issues related to EWA, including the rescinding of a no-action letter by the CFPB and the potential for enforcement under state laws. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.