The Innovative Payments Association (IPA) has submitted a letter to the Federal Deposit Insurance Corporation (FDIC) addressing the proposed rule on recordkeeping for custodial accounts with transactional features. This rule is intended to enhance the FDIC’s ability to determine deposit insurance coverage quickly in the event of an institution's failure.
In our response, we acknowledged the importance of the proposed rule while urging the FDIC to refine its scope. Specifically, we recommended excluding products like gift cards, single-load payment devices, and similar offerings that do not function as substitutes for traditional deposit accounts. We also highlighted concerns about the potential compliance burden and suggested extending the implementation period from one to two years. To learn more, download the comment letter. Stay informed about developments in the financial services industry by following the IPA. IPA Urges FDIC to Preserve Key Brokered Deposit Rules to Protect Innovation and Consumer Access11/13/2024 The Innovative Payments Association (IPA) recently submitted a comment letter to the FDIC concerning proposed rule changes to brokered deposits. We voiced strong concerns about the elimination of key exceptions, such as the "Enabling Transactions Exemption" and exclusive deposit relationships, which have provided essential clarity and promoted financial innovation. IPA urged the FDIC to retain these exceptions to avoid stifling fintech-bank partnerships that have expanded consumer access to critical financial services.
Moreover, treating fintech deposits as inherently risky "brokered deposits" threatens innovation and limits consumer options. We emphasize the need for data-driven analysis and further study before implementing changes that may adversely impact consumers, innovation, and competition in financial services. For more details, download the comment letter. 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. |