The Innovative Payments Association (IPA) recently submitted a comment letter to federal regulators, who are considering new rules for partnerships between banks and fintech companies. The IPA urges the agencies to consider the potential negative consequences of additional regulations before imposing them.
The IPA believes these partnerships offer significant benefits to both consumers and the financial system, and, in the comment letter highlight several key points:
You can download the full comment letter below, or contact the IPA. The Innovative Payments Association (IPA) recently filed a comment letter criticizing a proposed rule by the Consumer Financial Protection Bureau (CFPB) that would classify earned wage access (EWA) products as debt under Truth in Lending Act (TILA) regulations.
Key Points of the IPA's Argument:
The Innovative Payments Association (IPA) is writing to the Department of the Treasury to comment on the President's 2025 Budget Proposal regarding on-demand pay (ODP). The IPA argues that the Proposal's definition of ODP is inaccurate and that the Proposal would create a significant administrative burden for businesses. The IPA also argues that the Proposal would not have a significant impact on tax revenues.
The IPA recommends that the Treasury Department revise the Proposal to reflect a more accurate description of the current ODP marketplace and to acknowledge that the vast majority of ODP arrangements are offered by third-party providers. The IPA also recommends that the Treasury Department clarify that disbursements made via a third-party ODP provider should be excluded for tax purposes at the time of their disbursement. Overall, the IPA is concerned that the Proposal would make it more difficult for businesses to offer ODP to their employees. The IPA believes that ODP is a valuable tool that can help employees manage their finances and avoid costly payday loans. The Innovative Payments Association (IPA) is urging the California Department of Financial Protection and Innovation (DFPI) to clarify its proposed regulations for Earned Wage Access (EWA) providers.
The IPA, which represents a number of EWA providers, argues that the current draft of the rule may create confusion and unnecessary burdens on businesses. Specifically, the IPA is concerned about the rule's reporting requirements and fee definitions, which could lead to misleading information for consumers. The association believes that not all EWA transactions should be treated as loans under California law. They argue that many EWA models do not resemble credit and should be exempt from the California Financing Law (CFL). The IPA is calling on the DFPI to:
The Innovative Payments Association (IPA) is urging California's Department of Financial Protection and Innovation (DFPI) to refine its proposed regulations for Earned Wage Access (EWA) providers. The IPA argues that the current draft lumps together all EWA products, potentially creating unnecessary burdens and misleading consumers.
Key Concerns:
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