November 10, 2021

​​​​The Government Update 

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​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].

IPA CEO Testifies on Earned Wage Access Before Congress
Brian Tate, the IPA’s CEO, testified in front of the House Financial Services Committee’s Task Force on Financial Technology in a hearing on November 2 entitled “Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products.” 
 
The following witnesses testified: 

• Dr. Kristen Broady, Fellow in the Brookings Metropolitan Policy Program, 
• Brookings Institution
• Penny Lee, CEO, Financial Technology Association
• Lauren Saunders, Associate Director, National Consumer Law Center
• Marisabel Torres, Director of California Policy, Center for Responsible Lending
• Brian Tate, CEO and President, Innovative Payments Association.

 
He covered the uses of earned wage access by individuals and companies and responded to questions from the panel. You can find a replay of the hearing and additional information at: Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products | Financial Services Committee (house.gov)

Podcast: New Agency Heads Will Change the Regulatory Environment
In this episode Brian Tate talks about testifying at the hearing described above and what he thinks the questions and testimony of the other panelists might tell us about the future of payments regulation. 
 
You can listen to the podcast on your favorite podcast app or on our site.
 
Make sure to subscribe and leave us a review. 
 
IPA Joins a Coalition to Comment on the Chip Shortage
The IPA has joined a coalition of financial services and trade associations to responding to the U.S. Department of Commerce’s Request for Comment regarding disruptions to the supply chain, specifically for microchips. 
 
The U.S. Department of Congress published a request for public comment on the semiconductor chip shortage affecting a number of industries across the United States on Sept. 24. The shortage has been caused by the COVID 19 pandemic. The request seeks input on:

• Production capacity
• Disruptions to the supply chain
• Purchase commitments

 
For more information on how the chip shortage could affect the payments industry, see IPA COO Ben Jackson’s column in Digital Transactions: Payments 3.0: The Chips are Down. So Are the Cards – Digital Transactions
 
You can find the Commerce Department’s request for comment here: Federal Register :: Notice of Request for Public Comments on Risks in the Semiconductor Supply Chain
 
IPA Signs Joint Trade Letter to White House on IRS Reporting
The IPA has signed a letter from a coalition of financial services trades including American Bankers Association, the Consumer Bankers Association, the Credit Union National Association, the Independent Community Bankers of America, and other companies addressed to the White House opposing the proposed new tax information reporting regime from the Biden Administration. This proposal would have required providers of financial services to track and submit to the IRS information on the inflows and outflows of every account above a de minimis threshold of $600 during the year. The proposal seems to have been removed from any enabling legislation for the time being. 

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Office of the Comptroller of the Currency & Federal Deposit Insurance Corp. 
Stablecoin Report Released by President Task Force, Regulators
 
A report on stablecoins, which are digital assets pegged to a currency and designed to maintain their value, was released by President’s Working Group on Financial Markets (PWG), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency at the beginning of November. The report calls for several measures to protect users and the payments system including:

• Legislation to require that stablecoins be issued by insured depository institutions,
• Legislation to require federal oversight of stablecoin wallet providers, and
• Legislation to require stablecoin issuers to comply with activities restrictions that limit 
• affiliation with commercial entities.

 
You can find a copy of the full report here: Report on Stablecoins (treasury.gov)

Capital Clues

• The nomination of Saule T. Omarova, the Beth and Marc Goldberg Professor of Law at Cornell University, to be the next comptroller of the currency could get a hearing in the week of Nov. 15. Prof. Omarova’s writing about the banking system have drawn scrutiny and criticism. Senator Pat Toomey (R-PA) is urging opposition to her nomination.
• The nomination of Graham Steele to be Assistant Secretary of the Treasury will be debated on November 13. 

New Federal Laws
 
None.
 
Pending Federal Bills
 
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 Judiciary Committee on November 3.
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)