As artificial intelligence continues to reshape the financial services landscape, policymakers are increasingly focused on how to foster innovation while maintaining strong consumer protections. In a recent comment letter to the House Financial Services Committee, the Innovative Payments Association (IPA) expressed its support for H.R. 4801, the Unleashing AI Innovation in Financial Services Act.

The letter highlights how AI is already playing a meaningful role across the industry, particularly in areas like fraud prevention, and underscores the significant potential for future applications. As new technologies emerge, financial institutions are looking for clear pathways to responsibly test and deploy these tools without facing unnecessary regulatory barriers.

H.R. 4801 aims to strike that balance by creating a framework that allows companies to experiment with AI in coordination with key federal regulators. By enabling collaboration with agencies such as the FDIC, OCC, and CFPB, the legislation would support innovation while maintaining appropriate oversight and safeguards.

The IPA emphasizes that thoughtful integration of AI can strengthen the financial ecosystem, which enhances services, improving security, and delivering better outcomes for consumers. The association encourages lawmakers to advance the bill as part of a broader effort to ensure the U.S. remains competitive in the global AI landscape.

The Innovative Payments Association (IPA) recently submitted a comment letter to the Federal Reserve in response to its Request for Information on the future of the Federal Reserve Banks’ check services. As policymakers consider how the payments system should evolve, the IPA emphasized the importance of prioritizing secure, efficient electronic payment options over continued reliance on paper checks.

In the letter, the IPA notes that electronic payment methods, including prepaid accounts, mobile wallets, and other digital payment products, offer stronger consumer protections and greater efficiency than traditional paper checks. These products are typically governed by federal consumer protection rules, provide error resolution and limited liability protections, and operate within regulated banking and anti-money laundering frameworks.

The IPA also highlighted the role electronic payments play in expanding financial access. Government agencies increasingly use digital and prepaid payment options to distribute benefits such as Social Security, unemployment insurance, and tax refunds. These tools help reach unbanked and underbanked consumers while reducing administrative costs and fraud risks associated with mailed checks.

​As the Federal Reserve evaluates the future of its check services, the IPA urged the Board to carefully consider the benefits of modern electronic payment systems and to conduct a transparent review of how payment infrastructure should evolve.

The Innovative Payments Association (IPA) recently submitted a comment letter to the Office of the Comptroller of the Currency (OCC) in response to its request for input on Reg E requirements for prepaid accounts. The letter reflects IPA members’ view that the current Prepaid Rule has not kept pace with how consumers use prepaid products and mobile financial tools today.

Prepaid accounts, including prepaid cards, mobile wallets, and peer-to-peer payment products, have become primary financial tools for millions of Americans. However, key aspects of the rule were developed before widespread mobile banking adoption and now impose compliance obligations that are often duplicative, outdated, and confusing for both providers and consumers.

In its comments, the IPA outlines targeted recommendations to modernize the regulation while maintaining strong consumer protections. These include streamlining disclosure requirements, revisiting rigid electronic disclosure formatting standards, and aligning prepaid account obligations more closely with those that apply to credit cards and traditional deposit accounts.

The IPA believes thoughtful modernization of the Prepaid Rule would reduce unnecessary regulatory burden, support innovation, and better reflect how consumers interact with financial services today -- without weakening Reg E’s core protections.

For a detailed discussion of IPA’s recommendations and policy rationale, download the full comment letter.

The Innovative Payments Association (IPA) recently submitted a comment letter to the Office of the Comptroller of the Currency (OCC) in response to its Request for Information (RFI) on community banks’ engagement with core processors and other essential third-party service providers. The RFI seeks insight into how these relationships function, the challenges community banks face, and whether additional supervisory or regulatory action may be warranted.
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In its letter, IPA emphasized the critical role bank-fintech partnerships play in enabling community banks to compete in an increasingly digital and online marketplace. These arrangements allow community banks to offer modern, technology-driven financial products while maintaining safety, soundness, and strong consumer protections. IPA highlighted that many of its members operate within these partnerships, either as sponsoring financial institutions or as fintech service providers, and have seen firsthand the benefits these models deliver to banks and consumers alike.

IPA also underscored the importance of bank-fintech partnerships in expanding financial inclusion. Products such as prepaid and fintech debit accounts, earned wage access, and buy-now-pay-later solutions have helped underserved and underbanked consumers access the financial mainstream. These offerings reduce reliance on more costly alternatives and provide users with fraud protections, budgeting tools, and real-time account access comparable to traditional banking services.

Beyond consumer benefits, IPA noted that bank-fintech partnerships have been instrumental in supporting government payment programs at the federal, state, and local levels. These partnerships have enabled faster, more cost-effective electronic disbursement of government funds, particularly for recipients without traditional bank accounts, and played a significant role during the COVID-19 pandemic response.

Importantly, IPA stressed that bank-fintech arrangements already operate within a robust and well-established regulatory framework. Existing interagency guidance, banking laws, consumer protection rules, and supervisory tools provide regulators with meaningful oversight and risk management capabilities. While acknowledging that enforcement actions have occurred in cases of inadequate oversight, IPA cautioned against imposing additional or overly prescriptive regulations that could increase costs, stifle innovation, and ultimately disadvantage community banks and consumers.

IPA encouraged the OCC to carefully weigh both the benefits of these partnerships and the sufficiency of the current regulatory framework before pursuing new regulatory requirements.

The Innovative Payments Association (IPA) recently submitted a comment letter to the Federal Communications Commission (FCC) in response to the agency’s proposed rule, Advanced Methods to Target and Eliminate Robocalls. The proposal would update requirements under the Telephone Consumer Protection Act (TCPA) and could have significant implications for how financial institutions and payments companies communicate with consumers.

In its comments, the IPA expressed support for the FCC’s efforts to combat illegal and unwanted robocalls, while emphasizing the importance of preserving consumers’ ability to receive critical, wanted communications from their financial institutions. The letter highlights several key considerations for policymakers as the Commission evaluates the proposed changes.

Key highlights:

• Protecting access to critical communications: The IPA cautioned that overly broad consent revocation requirements could unintentionally prevent consumers from receiving important messages, such as fraud alerts, low balance notifications, multi-factor authentication messages, and other account-related communications designed to protect consumers.
• Concerns with a universal or “revoke all” opt-out approach: The letter explains that allowing a single opt-out request to automatically stop all communications across unrelated business units or services may create confusion for consumers and operational challenges for financial institutions, without delivering clear consumer benefits.
• Operational and compliance challenges: The IPA outlined the complexity financial institutions—particularly smaller institutions—would face in implementing systems capable of instantly halting all communications across multiple platforms, vendors, and business lines.
• Need for regulatory clarity and cost-benefit analysis: The association urged the FCC to conduct a thorough cost-benefit analysis of the proposed consent revocation provisions, including their impact on small institutions, and to consider refinements that would provide greater operational certainty while maintaining consumer protections.

The IPA reiterated its willingness to engage in continued dialogue with the FCC and other stakeholders to ensure that efforts to reduce illegal robocalls do not unintentionally undermine consumer protection, financial security, or effective communication.