December 15, 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: gr@ipa.org.

Podcast: Digital Driver’s Licenses May Come Next Year
Nearly everything in a physical wallet can be put into a digital wallet. For a long time, the one exception was your driver’s license, but that may soon change. 
 
Apple has struck deals with a number of states to put licenses into iPhones. In this episode, Jason Mikula, the publisher of Fintech Business Weekly, talks about what he found when he reviewed the deals and how they look nearly identical from state to state and give Apple much of the control over the programs. The company has said on its iOS 15 Web site that it will launch a driver’s license or ID feature in 2022. 
 
We discuss the pros and cons of digital driver’s licenses and of private companies getting into what was once purely a government domain.
 
You can listen to the podcast on your favorite podcast app or at our site: Podcast - Innovative Payments Association (ipa.org). Make sure to subscribe and leave us a review. 
 
IPA Joins a Coalition to Comment on the FTC Provision of the Build Back Better Bill
​The U.S. Chamber of Commerce has invited the IPA to sign a joint trade letter opposing the FTC penalty provisions in the reconciliation bill.  In brief, Sections 35501 and 35502 of the bill would give the FTC authority to obtain first-time civil penalties against companies that engage in unfair or deceptive trade practices. Please note the bill is being supported by the National Consumer Law Center and other consumer groups.
 
IPA Members Can Get a Discount for the ACI Prepaid Accounts Compliance ConferenceIPA members can receive a discount on registration for ACI’s 22nd Annual National Forum on Prepaid Accounts Compliance, taking place February 23-24 in Washington, DC.  
 
Use registration code S10-857-857I22.S by December 17, for a 10% discount off of the early main conference fee.  
 
To learn more, visit: https://www.americanconference.com/prepaidaccounts/

​Saule Omarova Withdraws from Comptroller Nomination Process 
Prof. Saule Omarova withdrew from the Comptroller of Currency nomination process, the White House announced on Dec. 7. In a letter, she described her nomination as “no longer tenable.” In an interview with National Public Radio, she attributed opposition to a “caricature” of her written work.

CFPB Director Chopra Tries to Run the FDIC Along With the CFPB 
The Consumer Financial Protection Bureau and the Federal Deposit Insurance Corporation are at odds over a request for public comment on the Bank Merger Act. The CFPB published the request on its own site on Dec. 9, saying that the FDIC board had approved the request. The FDIC’s Board is currently composed of the Chairman of the FDIC, Director Martin Gruenberg (internal), the Director of the CFPB Rohit Chopra, and the Acting Comptroller of the Currency, Michael Hsu. 
 
The same day, the FDIC published a release on its own site that said no request for information had been voted on by the board and that it looked for to a collegial relationship with other regulators in the future. 
 
On Dec. 14, CFPB Rohit Chopra published a statement on the CFPB Web site saying that he, Gruenberg, and Hsu voted for the request over e-mail, so it should be published in the Federal Register. Chopra described the refusal of FDIC Chairwoman Jelena McWilliams to publish the request as “an attack on the rule of law.”

Senators and industry observers described the dispute over the request for information as an attempt to oust the Republican-appointed McWilliams by Democrats at the other agencies, the New York Times reported.
 
The spat prompted U.S. Representative Blaine Luetkemeyer (R-MO) has introduced a bill entitled, “the FDIC Board Accountability Act,” to revise the membership requirements for the Board of Directors of the FDIC.  
 
If enacted, the FBAA would make the Director of the CFPB a non-voting member of the Board and replace the Director with a new presidential appointee (subject to Senate confirmation) who possesses community bank experience.  In addition, the bill would limit Board membership to two-terms. The IPA has a copy of the language of the bill if you are interested. 

Notable State Issues
 
New York Gift Card Law Adds Fee and Expiration Limitations
A new law in New York State place limitations on the fees that can be charged on gift cards and extends their expiration date. 
 
The law, signed on Dec. 10, includes the following provisions:

• No fees can be charged on closed-loop gift cards
• Open-loop gift cards may charge one activation fee
• The funds underlying a gift card may not expire for nine years
• Closed-loop gift cards with a balance of less than $5 must be redeemable for cash
• Promotion gift cards are exempt for the expiration requirements.

 
You can find the complete text of the bill here: NY State Senate Bill S3467B (nysenate.gov)


New Jersey Gift Card Bill Seeks to Provide Fraud Protections
A gift card bill in New Jersey seeks provide additional protections to gift card holders in the event of a fraud. In short, the bill would require issuers to:

1. immediately freeze any remaining funds on a gift card upon receiving a purchaser’s report of fraud; 
2. provide a full refund to the purchaser after the conclusion of a fraud investigation, if the instance of fraud was reported by the purchaser within two weeks of purchase or issuance of the gift card; 
3. require the gift card issuer to conclude its fraud investigation not more than two weeks after the date the fraud was reported;
4. operate a hotline or an Internet website where a purchaser may review the issuer’s policies regarding gift card fraud and report instances of fraud;
5. at the time of purchase or issuance of a gift card, inform the purchaser of its policies regarding gift card fraud and the existence of a hotline or Internet website where the purchaser may report fraud; and
6. maintain and provide to the purchaser upon request information including the amount of funds remaining on the gift card at the time the purchaser reports an instance of fraud and a list of time stamped disbursements of gift card funds if any funds were used prior to the purchaser reporting an instance of fraud.

 
An earlier provision that would require issuers to hold any balance over $100 for 48 hours was removed by a senate committee. The bill is still in the Assembly Consumer Affairs Committee. The two-year legislative session will end at the end of the year, and all unfinished business expires, so this bill may end here.

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)