On October 18, a fintech trade group filed a complaint in a D.C. federal court challenging the CFPB’s interpretive rule on Buy Now, Pay Later (BNPL) products. The rule, released last May, treats BNPL providers as credit card providers under TILA (previously discussed here). The complaint alleges various violations of the Administrative Procedure Act (APA), among others, claiming that the CFPB violated the APA’s notice and comment requirements, exceeded its statutory authority when issuing the rule, and acted in an arbitrary and capricious manner in imposing requirements on BNPL providers.Continue Reading Trade Group Challenges CFPB’s Buy Now Pay Later Rule
Payments
Swipe Fee Saga Continues: OCC and Trade Groups Clash with Illinois AG
The banking industry’s efforts to challenge a new Illinois law banning interchange fees, also known as “swipe fees,” on tax and tip payments gained significant momentum when the OCC criticized the law as an “ill-conceived” threat to the “efficient and effective” operation of the banking system in an amicus brief filed in Illinois federal court on October 2. Continue Reading Swipe Fee Saga Continues: OCC and Trade Groups Clash with Illinois AG
CFPB Revises Disclosure Requirements for Remittance Providers
On September 20, the CFPB announced a proposed rule which would make a minor yet noteworthy amendment to the guidelines for the disclosures that remittance providers are required to provide to consumers in connection with certain international money transfers, or remittances.Continue Reading CFPB Revises Disclosure Requirements for Remittance Providers
CFPB Issues Circular Warning Against Overdraft Practices
On September 17, the CFPB issued a circular stating that financial institutions can be found liable for violating the Electronic Funds Transfer Act by charging overdraft fees if the there…
Continue Reading CFPB Issues Circular Warning Against Overdraft PracticesSenators Urge Regulators to Adopt Tighter Controls for BNPL
In a letter to the CFPB released on September 10, several Senate Democrats implored the Bureau to establish stricter guardrails for BNPL providers, arguing that consumer harm will occur absent…
Continue Reading Senators Urge Regulators to Adopt Tighter Controls for BNPLCongressional Measure Aims to Undo Recent CFPB Buy Now Pay Later Guidance
On August 2, members of U.S. House of Representatives introduced H.J. Res. 195, a joint resolution providing for congressional disapproval under the Congressional Review Act (CRA) of recent CFPB guidance (previously discussed here) on buy now pay later (BNPL) lending. The Bureau’s guidance applied TILA protections previously reserved for credit card issuers, to BNPL lenders. Continue Reading Congressional Measure Aims to Undo Recent CFPB Buy Now Pay Later Guidance
CFPB Report Spotlights Hidden Fees in School Lunch Payments
The CFPB recently released a report on payment processing companies that manage school lunch payments for school districts. The companies, the report argues, cater to a captive market and often impose transaction fees that disproportionately affect low-income families. According to the Bureau, the report is intended to assist school districts in avoiding contracts with firms that charge families allegedly excessive fees to process their school lunch payments.Continue Reading CFPB Report Spotlights Hidden Fees in School Lunch Payments
Swipe Fee Showdown: Illinois Passes Novel Payments Law
Illinois has become the first state to enact restrictions on credit and debit card interchange fees – commonly known as swipe fees – linked to taxes and gratuities. The Interchange Fee Prohibition Act (the “Act”), embedded as Section 150-10 of the state’s latest revenue bill, signed on June 7 by Governor J.B. Pritzker, aims to accommodate retailers who have long contested the fairness of these fees. The Act forbids card issuers, payment card networks, acquirer banks and payment processors from charging retailers for swipe fees on gratuities and “any use and occupation tax or excise tax” imposed by the State or a local government. The Act will become effective in July 2025.Continue Reading Swipe Fee Showdown: Illinois Passes Novel Payments Law
CFPB Interpretive Rule Holds That BNPL Lenders Are Credit Card Providers
On May 22, the CFPB announced an interpretive rule confirming that Buy Now, Pay Later (BNPL) lenders qualify as credit card providers under the Truth in Lending Act, Regulation Z and are required to provide consumers legal protections and rights that apply to credit cards, including the ability to dispute charges, secure refunds for returned products and receive billing statements.Continue Reading CFPB Interpretive Rule Holds That BNPL Lenders Are Credit Card Providers
FTC Calls Out Bill Payment Company’s Use of Dark Pattern Practices
On April 25, the FTC took action against a Washington-based bill payment company and its two co-founders alleging that the company used misleading search ads to impersonate consumers’ billers and deceptive design practices to mislead those consumers into paying “junk fees” they tacked on to consumers’ bills. Continue Reading FTC Calls Out Bill Payment Company’s Use of Dark Pattern Practices
FTC Cracks Down on Payments Processor for Facilitating Fraud
On May 1, the FTC announced a settlement in federal court in the Northern District of Georgia against a payment processing company, along with its former CEO and senior vice president, for the company’s role in handling transactions for a debt-relief company engaging in fraud. The defendants have agreed to a settlement that includes a $10 million payment to compensate affected consumers and tighter restrictions on future business operations.Continue Reading FTC Cracks Down on Payments Processor for Facilitating Fraud