​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​is issued by the Innovative Payments Association twenty times a year as a service to members.
Editors: Brian Tate, President and CEO, IPA; Ben Jackson, COO, IPA;  Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP. Please address comments and suggestions to: [email protected].

Summer of Learning Schedule Continues to Grow
The IPA continues to add interesting and informative webinars to our Summer of Learning Series. We currently have the following scheduled:

• July 6th — California’s Regulatory Landscape with the CA DFPI. 
• July 20th  — Stablecoin Update with Davis, Wright, Tremaine’s Alex Barrage 

 
Digital Wallets – Peer-to-Peer “P2P” Payment Systems
Rachel Gittlemen of the Consumer Federation of America has published a blog posthighlighting the popularity of the mobile payment and peer-to-peer payment systems, lack of FDIC deposit insurance and regulatory oversight, and consumer data privacy concerns. 

Financial Services Committee Passes 10 Bills
During a legislative markup last week the Financial Services Committee passed 10 bills and sent them to the House floor for consideration. Notable bills include a measure to provide whistleblower incentives and protections, which passed by a voice vote; and a bill which would eliminate a regulatory exemption that allows firms to operate FDIC- insured banks as industrial loan companies without being subject to traditional supervision requirements. Rep. Carolyn Maloney’s (D-NY) Overdraft Protection Act was initially noticed in the markup announcement but was not considered during the actual markup.
 
Data Privacy Bill Passes Subcommittee
The American Data Privacy and Protection Act was reported favorably by the House Energy and Commerce Committee, Subcommittee on Consumer Protection and Commerce. The bill has been sent to the full Committee for consideration. The bill would give consumers more control over their online data and would require companies to minimize the amount of information they collect. The bill would preempt all but 15 state privacy laws and would create a private right of action.
 
Sen. Warren Request OCC Block TD Bank Merger
Sen. Elizabeth Warren sent a letter to the Office of the Comptroller of the Currency requesting they block TD Bank’s acquisition of Tennessee-based First Horizon until allegations of customer fraud at the bank are investigated. Warren cited a May 4th report by Capitol Forum which alleged TD Bank incentivized employees to enroll customers in new accounts and services such as overdraft protection without their consent. These allegations of fraud and abuse were investigated by the OCC in 2017,but Acting Comptroller Noreika refused to publicly reprimand or fine the bank. The letter asks that the OCC release the result of the 2017 investigation into TD bank, review Norieka’s decision to forego penalties, and prevent the proposed merger and any future mergers until the allegations are addressed. 
 
CFPB Launches Initiative to Improve Customer Service at Big Banks
The CFPB has issued a Request for Information in an attempt to improve customer service at big banks. Specifically, the CFPB is interested in customer services challenges that customers face, and the effect on their ability to access financial products and services. 
 
CFPB Blog Post on BNPL and Credit Reporting
This morning the CFPB published a blog post  about the inclusion of Buy Now Pay Later payments in consumer credit scores. The blog notes that the three largest nationwide consumer reporting companies, Equifax, Experian, and TransUnion, have described plans to accept BNPL payment data, but that inconsistent treatment may limit the potential benefits to consumers and the credit reporting system. The Bureau pledged to monitor the progress of BNPL providers and consumer reporting agencies as the market grows and more payment data is provided.
 
CFPB Blog Post on Overdraft
The CFPB has published a blog post on the impact of overdraft programs on consumers. The blog post did not reveal any new information but reminded readers of two December 2021 research reports on overdraft fees, described a supervision effort to collect information on overdraft from over 20 financial institutions, and highlighted CFPB efforts to encourage banks to reduce or eliminate overdraft fees.
 
CFPB Director Chopra Blog Post on Financial Regulation
The CFPB has published a blog post authored by Director Rohit Chopra, outlining the Bureau’s efforts to simplify rules and regulations, and to increase the amount of guidance provided to the financial industry.

Director Chopra also noted several rulemaking priorities, including those related to consumer access to their financial records, increasing transparency in the small business lending marketplace, and implementing quality control standards for automated valuation models. Notably, Director Chopra also highlighted that the CFPB is considering utilizing Congressional authority to register certain nonbank financial companies to identify potential scammers and those that repeatedly violate the law. 
​
Rep. Himes Publishes Proposal for CBDC
Rep. Jim Himes (D-CT), has published a whitepaper entitled “Winning the Future of Money: A Proposal for a U.S. Central Bank Digital Currency” with the goal of beginning a dialogue and debate that will lead to draft legislation to create a U.S.-issued Central Bank Digital Currency (CBDC). The whitepaper outlines the advantages of a CBDC over a privately issued stablecoins and highlights that a CBDC should not be thought of a replacement for legacy payment systems and currencies but as an alternative for consumers and businesses.
 
CFPB Announces Review of Credit Card Company Late Fees
The CFPB has issued an Advanced Notice of Proposed Rulemaking (ANPRM) seeking information on credit card late fees, asking credit card issuers, consumer groups, and the public to provide answers to several questions related to late fees and late payments. The deadline for submitting comments is July 22, 2022.
 
McHenry Releases Discussion Draft of Financial Data Privacy Bill
Rep. Patrick McHenry (R-NC), Ranking Member of the House Financial Services Committee, released a discussion draft of a financial data privacy bill. The bill would grant consumers control over their personal information, and would ensure consumers have the right to terminate collection of their data and/or request deletion of their data at any time. The bill would also create a national standard to reduce compliance burden and provide certainty to consumers and entities that handle financial data.  
 
NY State Legislature Passes A266
NY Assembly Bill 266 has passed the Assembly and Senate and is now awaiting the Governor’s signature. The bill would require notice of potential gift card scams to be displayed wherever gift cards are sold. The bill as introduced was initially very prescriptive and gave the exact language of the notice but, as passed, the bill only requires a conspicuous notice at or near the physical location where the sale occurs.

​New Federal Bills
Financial Data Privacy Bill Discussion Draft
 
Summary: The bill would modernize financial data privacy laws and give consumers more control over how their personal information is collected and used.
 
Status: Discussion Draft released. Not officially introduced.
 
Sponsor: Rep. Patrick McHenry (R-NC)
 
Pending Federal Bills
 
S. 4356 Responsible Financial Innovation Act
 
Summary: The bill would create a complete regulatory framework for digital assets that encourages responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law.
 
Status: Introduced in Senate on June 7, 2022
 
Sponsors: Senators Kristen Gillibrand (D-NY) and Cynthia Lummis (R-WY)
 
The Stablecoin Transparency of Reserves and Uniform Safe Transactions (Stablecoin TRUST) Act 
 
Summary: The bill would provide that payment stablecoin issuers must choose from one of three regulatory regimes: a traditional bank charter; a new federal license designed specifically for stablecoin issuers; or a state-based money transmitter or similar license under state law. The bill would also subject all payment stablecoin issuers to standardized disclosure, redemption, and audit requirements; and would clarify that stablecoins that do not offer interest are not securities.
 
Status: Proposed, but not yet introduced.
 
The Stablecoin Innovation and Protection Act
 
Summary: This bill would require stablecoin issuers to either become a bank or to partner with a bank, and be subject to bank-like regulation. The bill also requires nonbank stablecoin issuers to maintain collateral in an amount equal to 100 percent of the value of outstanding stablecoin.
 
Status: Proposed, but not yet introduced.
 
Sponsor: Rep. Josh Gottheimer (D-NJ)
 
H.R. 6415- To amend the Federal Reserve Act to prohibit the Federal reserve banks from offering certain products or services directly to an individual, and for other purposes.
 
Summary: This bill amends the Federal Reserve Act to prohibit the Federal Reserve banks from offering banking products and services, including CBDC, directly to consumers.
 
Status: Introduced in the House and referred to the Financial Services Committee on January 18, 2022
 
Sponsor: Rep. Tom Emmer (R-MN)
 
H.R. 4773 – Consumer Financial Protection Commission Act
 
Summary: This bill removes the CFPB from the Federal Reserve System, converts the Bureau into an independent commission, and modifies its leadership structure. Specifically, the bill eliminates the position of director and deputy director and establishes a five-person commission appointed by the President and confirmed by the Senate.
 
Status: Introduced in the House and referred to the Financial Services Committee on July 28, 2021
 
Sponsor:  Rep. Blaine Luetkemeyer (R-MO)
 
H.R.963 – Forced Arbitration Injustice Repeal (FAIR) Act
 
Summary: This bill prohibits a pre-dispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute.
 
Status: The bill passed the House on 3/17/2022 by a vote of 222-209 and was received in the Senate on 3/21/22.
 
Sponsor: Rep. Hank Johnson (D-GA)
 
H.R. 1711 – To amend the Consumer Financial Protection Act of 2010 to direct the Office of Community Affairs to identify causes leading to, and solutions for, under-banked, un-banked, and underserved consumers, and for other purposes.
 
Summary: This bill would direct the CFPB to conduct research on barriers to financial inclusion and identify hurdles under- and un-banked consumers. It would also require the Bureau to identify best practices to increase participation in the financial system and included a reporting requirement.
 
Status: Passed/agreed to in House on 5/18/21. Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs on 5/19/21.
 
Sponsor: Rep. David Scott (D-GA)
 
H.R. 1996 – SAFE Banking Act
 
Summary: This bill would allow marijuana-related businesses in states with some form of legalized marijuana and established regulatory structures to access the banking and payments system.
 
Status: Passed/agreed to in House on 4/19/21. Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs on 4/20/21.
 
Sponsor: Rep. Ed Perlmutter (D-CO)
 
H.R. 3968 - Municipal IDs Acceptance Act
 
Summary: This bill would require that the banking regulators update their guidance on Customer Identification Programs to state that an identification card issued by a municipality may be used by a bank to verify the identity of a customer, if such identification card enables the bank to form a reasonable belief that the bank knows the true identity of the customer.
 
Status: 06/23/2021 Ordered to be Reported from the Financial Services Committee in the Nature of a Substitute (Amended) by the Yeas and Nays: 27 - 23.
 
Sponsor: Rep. Richie Torres (D-NY)
 
H.R. 4277 – Overdraft Protection Act of 2021
 
Summary: This bill would limit overdraft fees, both in frequency and amount, and would establish a set of practices for overdraft coverage programs.
 
Status: Introduced and referred to the House Financial Services Committee on 6/30/21.
 
Sponsor: Rep. Carolyn Maloney (D-NY)
 
IV. U.S. Congress Members Not Seeking Re-Election in 2022
The current structure of the U.S. Senate is 48 Democrats, 50 Republicans, and 2 Independents. Currently 1 Democratic and 5 Republican Senators have announced they will not be running for reelection in 2022. The current structure of the U.S. House is 222 Democrats and 211 Republicans. Currently 31 Democratic and 18 Republican House members have announced they will not be running for reelection in 2022. More information about Congressional retirements can be found here. 
 

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​is issued by the Innovative Payments Association twenty times a year as a service to members.
Editors: Brian Tate, President and CEO, IPA; Ben Jackson, COO, IPA;  Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP. Please address comments and suggestions to: [email protected].

Summer of Learning Schedule Continues to Grow
The IPA continues to add interesting and informative webinars to our Summer of Learning Series. We currently have the following scheduled:

• June 15th, Strategies for Defense and Settlement of Mass Volume Arbitrations, featuring Dinsmore & Shohl’s Libby Shafer
• June 29th –Financial Inclusion with Judy Chapa of the Judy Chapa Co.
• July 20th – Stablecoin Update with Davis, Wright, Tremaine’s Alex Barrage 
• July 27th – Fintech/Credit Unions Partnership Opportunities with National Credit Union Administration Board Member Rodney Hood

Lummis-Gillibrand Responsible Innovation Act 
 
The long-anticipated text of the "Lummis-Gillibrand Responsible Innovation Act” sponsored by U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) was released on June 6th.  In brief, the bill attempts to build a framework around the cryptocurrency ecosystem by, amongst other things, mandating requirements for stablecoins; formally defining terms; outlining a clear distinction between digital assets that are commodities or securities by examining the rights or powers conveyed to the consumer via disclosures; underscores that existing law requires the Federal Reserve banks to make available payment, clearing and settlement services to any depository institution chartered under State or Federal law; and by establishing an Advisory Committee on Financial Innovation with the goal of studying and reporting to regulators on the evolving digital asset market.  
 
The specific sections of the bill are outlined below:

• Title I—Definitions
• Title II—Responsible Taxation of Digital Assets
• Title III—Responsible Securities Innovation
• Title IV—Responsible Commodities Innovation
• Title V – Responsible Consumer Protection
• Title VI – Responsible Payments Innovation
• Title VII – Responsible Banking Innovation
• Title VIII – Responsible Interagency Coordination

 
House Energy and Commerce Committee Releases Bipartisan Privacy Bill 
the House Committee on Energy and Commerce regarding their bipartisan Discussion Draft of Comprehensive Data Privacy legislation.  You can also find a section-by-section breakdown of the Discussion Draft here. At this time the Discussion Draft is expected to the focus of a hearing by the E&C Committee on June 14th. Lastly, attached above is a Senate version of the bill that was authored by U.S. Senator Maria Cantwell (D-WA).  
 
HFSC Advances Eight Bills
The House Financial Services Committee held a legislative markup and passed the Payment Choice Act of 2022 by a bipartisan vote, which would require retail establishments to accept cash payments for goods and services in amounts less than $2,000. It also passed the Expanding Financial Access for Underserved Communities Act, which would expand the field of membership for all federal credit unions. A bill which would eliminate a regulatory exemption for industrial loan companies was withdrawn.
 
McHenry, Luetkemeyer Send Letter to Chopra on Expanded UDAAP Policy
House Financial Services Committee Ranking Member Patrick McHenry and Subcommittee on Consumer Protection and Financial Institutions Ranking Member Blaine Luetkemeyer sent a letter with 17 of their Republican colleagues to CFPB Director Rohit Chopra to express concern with the CFPB’s recently released unfair, deceptive, or abusive acts and practices (UDAAP) supervisory policy and recent changes to the rule governing CFPB administrative adjudications. The new UDAAP policy will allow the CFPB to target discrimination, whether intentional or unintentional, as an “unfair” practice in all consumer financial products and services. While the Congressmen acknowledged there is no place for discrimination in financial services, they criticized the move as an expansion of CFPB’s statutory authority done outside of the typical notice and comment process. The letter included several questions for response focused on the rulemaking and enforcement of the expanded policy.
 
CFPB Clarifies State Enforcement Authority
The CFPB issued an interpretive rule that clarified states’ roles in the enforcement of the Consumer Financial Protection Act of 2010. Specifically, the interpretive rule affirms that states can enforce the Consumer Financial Protection Act, including the provision making it unlawful for covered persons or service providers to violate any provision of the federal consumer financial protection law. It also says that nothing in the Consumer Financial Protection Act precludes complementary enforcement activities on the national and state level and it outlines the broad cross-section of companies and individuals against which a state can purse claims.
 
CFPB Issues Blog Post on Nonbank Supervision
As a follow up to their recent announcement that they will increase supervision of nonbank institutions, the CFPB has released a blog post with additional details that may be helpful to institutions when assessing whether or not they may be subject to additional CFPB supervision. The post answers several questions related to CFPB’s supervisory authority and examinations, and provides useful links.
 
CFPB Issues Press Release on Black-Box Credit Models
The CFPB issued a Consumer Financial Protection Circular that outlines a company’s responsibilities when denying a credit application or taking any other adverse actions using complex algorithms or black-box credit models. The Circular notes that use of artificial intelligence in credit decisions does not absolve a company from adverse action notice requirements under the Equal Credit Opportunity Act (ECOA), and that noncompliance with ECOA notification requirements cannot be justified on the mere fact that the technology used to make the credit decision is too complicated or opaque for the applicant to understand.  
 
HFSC Chair Waters Announces June Committee Schedule
House Financial Services Committee Chair Maxine Waters has announced the Committee’s June hearing schedule. Notably, Federal Reserve Board Chair Jerome Powell will appear before the Committee on June 23rd for a hearing on monetary policy and the state of the economy.  
 
Bank of America Hit With Class-Action Lawsuit Related to Zelle Fraud
Bank of America is facing a class action lawsuit related to the fraud on the Zelle platform. IPA is still reviewing the complaint, but paragraph five should be of particular interest to our members:
“BofA prominently touts Zelle to its accountholders as a secure, free, and convenient was to make money transfers. However, it misrepresents and omits a key fact about the service that is unknown to accountholders: that there is virtually no recourse for consumers to recoup losses due to fraud. Indeed, unlike virtually every other payment method commonly used by American consumers—debit cards, credit cards, and checks—there is no protection for accountholders who are victims of fraud, and virtually no recourse for accountholders attempting to recoup losses due to fraud.”

CA DFPI Issues Invitation for Comments on Crypto-Related Financial Products and Services
As a follow-up to Governor Newsom’s recent Executive Order on blockchain development, the California Department of Financial Protection and Innovation has issued an invitation for comments from stakeholders and the public on the development of regulatory clarity in the offering of crypto asset-related financial products and services. More information, including a link to submit comments, can be found here. 
 
CA DFPI Releases Consumer Complaint Proposal 
The IPA has recently learned that the California’s Department of Financial Protection and Innovation (DFPI) has released a  Notice of Proposed Rulemaking  to implement, interpret, clarify, and make specific, certain sections of the California Consumer Financial Protection Law (CCFPL) that impose requirements on covered companies to respond to consumer complaints and report information about those complaints and responses to the DFPI.
 
Specifically, the DFPI is proposing to make explicit what it means to provide a timely response to consumers and to the Department regarding complaints against or inquiries concerning a covered person. Covered persons are expected to have appropriate procedures to review, investigate, respond to, track, and report consumer complaints and inquiries. Notably, these proposed procedures apply to complaints received directly by a company — they are not limited to complaints submitted to the DFPI. For each complaint, covered persons must provide the complainant with a written acknowledgement of receipt.  The deadline to submit comments to the CA DPFI is July 5th. 
 
FinCEN Issues ANPRM For No-Action Letters
The Financial Crimes Enforcement Network (FinCEN) has issued an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on questions related to the implementation of a no-action letter process at FinCEN. A June 28, 2021 FinCEN report to Congress concluded that FinCEN should undertake a rulemaking to establish a no-action letter process to supplement the existing regulatory guidance and relief that parties may request from FinCEN. Several benefits of no-action letters were noted, including encouraging dialogue with the public, promoting a culture of compliance, and enhancing transparent enforcement of the Bank Secrecy Act. 

New Federal Bills
None.
 
Pending Federal Bills
 
The Stablecoin Transparency of Reserves and Uniform Safe Transactions (Stablecoin TRUST) Act 
 
Summary: The bill would provide that payment stablecoin issuers must choose from one of three regulatory regimes: a traditional bank charter; a new federal license designed specifically for stablecoin issuers; or a state-based money transmitter or similar license under state law. The bill would also subject all payment stablecoin issuers to standardized disclosure, redemption, and audit requirements; and would clarify that stablecoins that do not offer interest are not securities.
 
Status: Proposed, but not yet introduced.
 
The Stablecoin Innovation and Protection Act
 
Summary: This bill would require stablecoin issuers to either become a bank or to partner with a bank, and be subject to bank-like regulation. The bill also requires nonbank stablecoin issuers to maintain collateral in an amount equal to 100 percent of the value of outstanding stablecoin.
 
Status: Proposed, but not yet introduced.
 
Sponsor: Rep. Josh Gottheimer (D-NJ)
 
H.R. 6415- To amend the Federal Reserve Act to prohibit the Federal reserve banks from offering certain products or services directly to an individual, and for other purposes.
 
Summary: This bill amends the Federal Reserve Act to prohibit the Federal Reserve banks from offering banking products and services, including CBDC, directly to consumers.
 
Status: Introduced in the House and referred to the Financial Services Committee on January 18, 2022
 
Sponsor: Rep. Tom Emmer (R-MN)
 
H.R. 4773 – Consumer Financial Protection Commission Act
 
Summary: This bill removes the CFPB from the Federal Reserve System, converts the Bureau into an independent commission, and modifies its leadership structure. Specifically, the bill eliminates the position of director and deputy director and establishes a five-person commission appointed by the President and confirmed by the Senate.
 
Status: Introduced in the House and referred to the Financial Services Committee on July 28, 2021
 
Sponsor:  Rep. Blaine Luetkemeyer (R-MO)
 
H.R.963 – Forced Arbitration Injustice Repeal (FAIR) Act
 
Summary: This bill prohibits a pre-dispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute.
 
Status: The bill passed the House on 3/17/2022 by a vote of 222-209 and was received in the Senate on 3/21/22.
 
Sponsor: Rep. Hank Johnson (D-GA)
 
H.R. 1711 – To amend the Consumer Financial Protection Act of 2010 to direct the Office of Community Affairs to identify causes leading to, and solutions for, under-banked, un-banked, and underserved consumers, and for other purposes.
 
Summary: This bill would direct the CFPB to conduct research on barriers to financial inclusion and identify hurdles under- and un-banked consumers. It would also require the Bureau to identify best practices to increase participation in the financial system and included a reporting requirement.
 
Status: Passed/agreed to in House on 5/18/21. Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs on 5/19/21.
 
Sponsor: Rep. David Scott (D-GA)
 
H.R. 1996 – SAFE Banking Act
 
Summary: This bill would allow marijuana-related businesses in states with some form of legalized marijuana and established regulatory structures to access the banking and payments system.
 
Status: Passed/agreed to in House on 4/19/21. Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs on 4/20/21.
 
Sponsor: Rep. Ed Perlmutter (D-CO)
 
H.R. 3968 - Municipal IDs Acceptance Act
 
Summary: This bill would require that the banking regulators update their guidance on Customer Identification Programs to state that an identification card issued by a municipality may be used by a bank to verify the identity of a customer, if such identification card enables the bank to form a reasonable belief that the bank knows the true identity of the customer.
 
Status: 06/23/2021 Ordered to be Reported from the Financial Services Committee in the Nature of a Substitute (Amended) by the Yeas and Nays: 27 - 23.
 
Sponsor: Rep. Richie Torres (D-NY)
 
H.R. 4277 – Overdraft Protection Act of 2021
 
Summary: This bill would limit overdraft fees, both in frequency and amount, and would establish a set of practices for overdraft coverage programs.
 
Status: Introduced and referred to the House Financial Services Committee on 6/30/21.
 
Sponsor: Rep. Carolyn Maloney (D-NY)
 
IV. U.S. Congress Members Not Seeking Re-Election in 2022
The current structure of the U.S. Senate is 48 Democrats, 50 Republicans, and 2 Independents. Currently 1 Democratic and 5 Republican Senators have announced they will not be running for reelection in 2022. The current structure of the U.S. House is 222 Democrats and 211 Republicans. Currently 31 Democratic and 17 Republican House members have announced they will not be running for reelection in 2022. More information about Congressional retirements can be found here.