​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​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.

IPA Podcast: New Agency Heads Will Change the Regulatory Environment 
The Consumer Financial Protection Bureau has a new director, and the Biden Administration has nominated a new Comptroller of the Currency. These two agencies regulate large swaths of financial services.  With the appointments, the industry likely will see a change in both the kinds of regulations that will be promulgated and the tone of interactions with the regulators. 
 
In this episode, we talk with Brian Tate, the CEO of the Innovative Payments Association, about what these changes might mean and how the industry can prepare.
 
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 Oppose Tax Reporting Proposal
​The IPA has joined a coalition of financial services trades (including ABA, ICBA, CUNA, etc.) and companies opposing the proposed new tax information reporting regime from the Biden Administration as part of the proposed Reconciliation package pending in Congress.  In brief, the proposal would require providers of financial services to track and submit to the IRS information regarding every account above a de minimis threshold of $600 during the year.  In total over 100 trade associations have signed the letter.  The letter will be sent to Members of the House and Senate.

CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) 
Rohit Chopra confirmed as CFPB Director, Will Testify Before Congress
On September 30, the U.S. Senate confirmed Rohit Chopra’s to be the next Director of the Consumer Financial Protection Bureau. He was sworn in on October 12.   He previously served at the CFPB from 2010 to 2015 and led the Bureau’s efforts on student lending issues. He will testify in front of the House Financial Services Committee on Oct. 27 and is expected to reveal some of his priorities as director. The hearing will be livestreamed at: https://financialservices.house.gov/live/.
 
 
OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC) 
Saule Omarova Nominated to be next Comptroller, Draws Scrutiny
On September 23, President Biden announced that he was nominating Saule T. Omarova, the Beth and Marc Goldberg Professor of Law at Cornell University, to be the next comptroller of the currency.
 
Saule’s nomination has drawn scrutiny because of her writings on the banking system. In an article for the Vanderbilt Law Review, she calls for “the complete migration of demand deposit accounts to the Fed’s balance sheet…”
 
Support for her nomination seems to be split along party lines, with Sen. Sherrod Brown (D-OH) releasing a statement in support, and Senator Pat Toomey (R-PA) saying he has “serious reservations” about her nomination. 

The Postal Service Begins Testing Financial Services
 The Washington Post reported that the United States Postal Service has begun a test where it is offering check cashing services at several east coast locations. It plans to expand the pilot to include other financial services such as bill payments, the Post said. You can read the article here: USPS moves toward banking services with paycheck-cashing test - The Washington Post
 
Postal Banking has existed in the past. Post Offices offered deposit accounts from 1910 through 1966. The accounts were aimed moistly at immigrants and people in rural areas who did not have access to banks. You can read more about the history of postal banking here: Banking on the Postal Service? | USPS Office of Inspector General (uspsoig.gov)
 
The idea of postal banking has come up many times since 1966. In 2020, Senator Kirsten Gillibrand (D-NY) and Bernie Sanders (I-VT) introduced the Postal Banking Act to allow the Postal to offer low-cost checking and savings accounts, ATMs, mobile banking, and low-interest loans. You can read more here: Senators Gillibrand And Sanders Reintroduce Postal Banking Act To Fund United States Postal Service And Provide Basic Financial Services To Underbanked Americans | Kirsten Gillibrand | U.S. Senator for New York (senate.gov)
 
 
Department of Commerce Requests Input on Impending Chip Shortage
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

 
It is seeking input from a variety of companies. The deadline to respond is November 8. You can find the notice here: Federal Register :: Notice of Request for Public Comments on Risks in the Semiconductor Supply Chain
 
The chip shortage could affect the payments industry by making it difficult to find chips for new EMV and contactless cards and by causing manufacturing problems for chip reading terminals. The IPA is working with its members and other organizations to look for possible solutions to the shortage.
 
 
California Governor Signs Bill for Requirements on Accepting Deposits
California Governor Gavin Newsome signed a bill into law on Oct. 5 that puts requirements on accounts that want to accept direct deposit of state funds for unemployment, welfare, and child support payments. Any account that wants to be able to accept these funds must be held at an insured depository institution and offer deposit insurance, provide consumer protections under the Electronic Funds Transfer Act, and not offer overdraft or credit features that charge a fee. You can find the full text of the law here: Bill Text - SB-497 Qualifying accounts for direct deposit of publicly administered funds. (ca.gov)
 
NCLC Writes to the CFPB to Ask it to Treat EWA as Credit
The National Consumer Law Center submitted a letter to the Consumer Financial Protection Bureau dated October 12, that requested that it treat all earned wage access products as extensions of credit and that it rescind an earlier compliance sandbox order that found earned wage access products are not credit. You can find NCLC’s letter here: CFPB-EWA-letter-coalition-FINAL2.pdf (nclc.org)
 
Research shows that earned wage access products are cheaper alternatives for liquidity than alternatives such as payday loans and pawn loans. (See Final Copy EWA & D2C Advance Usage Trends) 
 
Research by the Aite Group found that 81% of EWA users stopped using payday loans after EWA became available. (Aite Report - DailyPay)

​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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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)

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

IPA Podcast: Comdata Puts New Twists on Payroll Cards
 
The way companies pay workers has fallen out of step with their financial needs, and Comdata is looking to fix that with its Fintwist Payroll product. 
 
In the latest episode of the IPA Payments Pod, we talk with Brian Radin, the president of Comdata’s prepaid business about how the company has adapted its payroll business to meet the changes brought on by long-term trends and the acute problems that some companies are facing in the wake of the COVID19 Pandemic. 
 
Recognizing the companies are having a hard time recruiting and retaining, Comdata wanted to provide them with a product that would appeal to employees having a tough time managing their finances. By offering earned wage access and financial information in conjunction with a no fee account, they hope to make payroll a way for the companies to stand out in recruitment. 
 
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. 
 
To learn more about Fintwist, visit its Web site at Fintwist - Superior Workforce Payment Solutions (fintwistsolutions.com)
​

BOARD OF GOVENORS OF THE FEDERAL RESERVE SYSTEM 
 
The Fed Releases a Guide for Community Banks Wanting to Partner with Fintechs

The Board of Governors of the Federal Reserve has released a paper to help community banks who want to partner with fintech companies to create new products. The paper is not new guidance on third-party risk. Instead, it draws lessons from research on existing partnerships between banks and Fintechs to discuss the kinds of partnerships available and key considerations on the benefits and risks of them. You can find the full paper here: Community Bank Access to Innovation Through Partnerships (federalreserve.gov)
 
The Future of Cash is Examined in a Philadelphia Fed Research Paper
 
The Federal Reserve bank of Philadelphia released a paper entitled “The Future of Cash” that examines the role of cash payments in context of the rise in electronic payments. Despite the decline in cash payments over the past few years, and the pressures on cash use caused by the pandemic, that amount of cash in circulation has increased, which may be a sign that individuals are holding cash as a store of value. You can find the complete paper here: The Future of Cash (philadelphiafed.org)
 
Overdrafts Were Up in 2020, according to a Fed Survey
 
A report by the Federal Reserve Bank of Philadelphia found that 29 percent of respondents to its survey reported being charged an overdraft fee during the crisis. This was up from 24.3 percent of respondents reporting paying a fee in 2019. It also found that customers with higher incomes were more likely to ask for help from their banks and have fees refunded. You can find the full report here: Overdraft Use During the Pandemic: Insights from the CFI COVID-19 Survey of Consumers (philadelphiafed.org)
 
CONSUMER FIANCIAL PROTECTION BUREAU (CFPB)
 
Rohit Chopra’s Nomination to Lead the CFPB Moves Forward
 
On September 21, the U.S. Senate passed a motion, 49-48, to discharge Rohit Chopra’s nomination to be the next Director of the Consumer Financial Protection Bureau from the Senate Banking Committee. His nomination now moves from the Committee to the Senate floor. Two additional Senate votes (Cloture and final passage) are still needed before Chopra’s nomination is confirmed by the U.S. Senate.  
 
 
FEDERAL DEPOSIT INSURANCE CORP. (FDIC) & OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC) 
 
The FDIC. Federal Reserve, and OCC Currency Extend Comment Period on Risk Management
 
The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency has extended the guideline for public comment on its proposed guidance on third-party relationship risks.  The guidance would offer a framework for banks to use when developing risk management programs for third-party relationships, taking into consideration the size of the institution. It would replace each agency’s existing guidance.  
 
The new deadline to submit comments is October 18, 2021. You can read more here: 12 CFR Chapter II (fdic.gov)
 

Toomey Requests Feedback on Clarifying Laws Around Cryptocurrency and Blockchain Technologies
 
In a press release in late August, U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) announced he was seeking ideas and legislative proposals to make sure that federal law will help support the development of cryptocurrencies and blockchains. He plans to introduce legislation towards this end. Anyone looking to submit ideas has until September 27. You can find the full release here: Toomey Requests Feedback on Clarifying Laws Around Cryptocurrency and Blockchain Technologies | United States Committee on Banking, Housing, and Urban Affairs (senate.gov)
 
New Report on Machine Learning in Credit Underwriting
 
FinRegLab, an independent, nonprofit research organization that conducts research to evaluate new technologies and data, announced it has released a report on the use of machine learning in underwriting. The report “describes the current use of machine learning underwriting models and the choices firms are making in developing, implementing, and monitoring those models” You can find the report here: The Use of Machine Learning for Credit Underwriting: Market & Data Science Context - FinRegLab
 
California DFPI Office of Financial Technology Innovation Announces Virtual Office Hours
 
The California Department of Financial Protection and Innovation’s Office of Financial Technology Innovation has announced that it will hold virtual office hours for any financial company that wants to meet to discuss financial innovation or a product in development. 
 
Deputy Commissioner Christina Tetreault will meet with companies every Tuesday via Zoom from 9 to 10 a.m. Pacific Time. The meetings are scheduled for 20 minutes and can be booked on a first-come, first-serve basis at this link: Meeting Registration - Zoom
 
After registering, you will receive a confirmation email containing information about joining the meeting.

If you can’t make these times, then you can schedule a meeting with Deputy Commissioner Tetreault by emailing OFTI@DFPI.CA.Gov. She is interested in discussing potential products, business models, and other topics of concern for financial innovators.
 
CSBS Release Model Money Transmission Act
 
In a bid to help standardize the laws around money transmission from state to state, the Conference of State Bank Supervisors released a Model Money Transmission Modernization Act, also known as the Money Transmitter Model Law in August. The goal is to make sure that the rules across states are as uniform as possible, but this may require legislation, regulation, or guidance changes in the states. You can find more details here: CSBS Model Money Transmission Modernization Act | CSBS
 
 
Capital Clues
 
Below is latest intelligence the IPA has received on recent activity on Capitol Hill:
 

• We are hearing that Sen. Durbin has draft language seeking to possibly expand the Durbin Amendment like limitations to credit.  The draft language is not publicly available, but it is possible a bill could be introduced in the coming months.

 

New Federal Laws
 
S.J. Res 15 – A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of Currency relating to "National Banks and Federal Savings Associations as Lenders" (True Lender Congressional Review Act Resolution)
Summary: This disapproval resolution invalidates the OCC’s True Lender Rule, which addressed lending arrangements between banks and non-bank third party lenders. Additionally, the Resolution prevents the OCC from issuing the Rule, or one like it, again. 
Status: Signed by the President on 6/30/20.
Sponsor: Sen. Chris Van Hollen (D-MD)
 
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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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)

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

​IPA Podcast: Teaching Banks and Fintechs to Work Together
 
In the brave new world of financial services, there are opportunities for both innovative companies and traditional banks, but they need to understand one another if they want to thrive, says Joyce Mehlman, the founder of iLex Consulting Group.  
 
In the latest episode of the IPA Payments Pod, we talk about why Fintechs need to understand the difference and relative value of Banking as a Service versus a direct issuer model of working with banks. We also discuss how traditional banks need to understand where Fintechs offer more in terms opportunities than competition.
 
In addition, she explained how the latest group of Fintechs and their founders are different in that they are more focused on building a business long-term than they are in building up a company that can be sold.  
 
Listen here!

BOARD OF GOVENORS OF THE FEDERAL RESERVE SYSTEM 
 
IPA Files Comment in Response to Fed Debit Routing Proposed Rule
 
On July 22, the IPA submitted its comment letter to the Board of Governors of the Federal Reserve System (the Board) in response to their Notice of Proposed Rulemaking concerning Debit Card Interchange Fees and Routing. In brief, the IPA’s comment asks that the Board further consider the Proposed Rule's potential impacts on competition in the marketplace, the compliance burdens it may place on differently situated providers, and on the potential for the Proposed Rule's requirements to increase the presence of fraud in ecommerce transactions. The letter also asks the Board to make adjustments to the proposal accordingly to minimize such impacts and burdens. The letter further requests that the Board provide sufficient time for industry participants to implement whatever changes the Board ultimately makes as part of any final rule.
 
A copy of the letter can be accessed here. Thank you to all who provided feedback throughout the process of the drafting this comment letter. 
 
CONSUMER FIANCIAL PROTECTION BUREAU (CFPB)
 
Filing Deadlines Extended in PayPal Case Appeal
 
In July, the CFPB filed an unopposed motion to extend the time they have to file their initial brief in their appeal in the PayPal case. Accordingly, a modified scheduling order from the United States Court of Appeals for the District of Columbia Circuit has been issued. The modified order requires that the CFPB files its initial brief by August 16, 2021 and that PayPal files its initial brief by October 13, 2021. Additional documents will be due in early-mid November, with final briefs being due on December 8, 2021.
 
PayPal Faces SEC & CFPB Probes
 
In its recent quarterly earnings report, PayPal disclosed that it is facing probes by both the U.S. Securities and Exchange Commission and the Consumer Financial Protection Bureau.
 
The SEC is investigating whether the swipe fees paid to the banks that issue PayPal’s debit cards are consistent with Federal Reserve guidelines. The agency is also investigating how PayPal reports marketing fees earned from its branded-card program.
 
PayPal has responded to subpoenas and requests for information it received from the SEC’s enforcement division and is cooperating with the investigation, according to the filing.
 
Separately, PayPal said it received a civil investigative demand from the CFPB in connection to the marketing and use of PayPal Credit in connection with merchants that provide educational services. The regulator asked PayPal to produce documents, written reports and answers to written questions. The company said it is cooperating.
 
OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC)
 
Acting Comptroller of the Currency Tells Congress OCC is Reviewing Bank Overdraft Policies
 
In testimony before the Senate Banking Committee on August 3, Acting Comptroller of the Currency Michael Hsu said the bank regulator is conducting a review of bank overdraft policies. Acting Comptroller Hsu told senators his agency is "looking very closely at overdrafts."
 
"Excessive fees on overdrafts, predatory lending, high-cost debt traps — these things shouldn't have a place in the federal banking system," Hsu said, responding to Sen. Chris Van Hollen, D-MD, who brought up several small banks that derive a large portion of their revenue from overdraft fees. "We have a review going on, these particular institutions have been identified, as well as other practices. We're going to use the full range, within our supervisory toolkit, to address it."
 
He then asked Hsu whether or not he believed a bank that operates in such a way should be considered a "safe and sound institution."
 
"It certainly raises a lot of flags, and we follow up on those flags to ensure the firms are safe and sound," Hsu responded.
 
White House Reported to Be Vetting Cornell Professor for OCC Head
 
On August 5, the New York Times reported that the White House is vetting Saule Omarova, a Cornell professor, to head the Office of the Comptroller of the Currency (OCC). That report can be accessed here. 
 
Additionally, Ms. Omarova published a paper in February 2021 entitled, “The People’s Ledger: How to Democratize Money and Finance the Economy”, which a attempts to describe an approach to addressing, “…the challenge of “beating” the currently dysfunctional U.S. financial system by reimagining its fundamental structure and redesigning its operation.” From the paper’s conclusion - “This Article offers a blueprint for radically reshaping the basic architecture and dynamics of modern finance. Using the creation of digital dollar FedAccounts as its starting point, the Article constructs a coherent set of structural reforms aiming to make the financial system more inclusive, efficient, and stable. It advocates a comprehensive update of the Federal Reserve’s balance sheet—the nation’s core economic ledger—to maximize its structural capacity to support productive economic enterprise, in the long-term interests of the American people. In effect, it re-imagines the role of a central bank as the ultimate public platform for generating, modulating, and allocating financial resources in a modern economy—the People’s Ledger:”

​New Reports on Digital Money
 
A few reports on digital money were released be various organization in recent weeks that are worth highlighting. The first, a report from The Clearing House (TCH), examines the challenges and opportunities associated with central bank digital currencies (CBDC). Specifically, it highlights significant implications of certain design and implementation choices that might be made with respect to a U.S. CBDC and makes specific recommendations about CBDC, assuming the U.S. government may proceed with some form of CBDC implementation.
 
The second report is from the Diem Association (formerly known as Libra) on the payments system. Titled “Why is the United States Lagging Behind in Payments?”, the paper offers criticism of payment fees, account fees, bank consolidations, interchange, and more. In addition, it outlines three ways to “remove frictions” and improve payments, which include a CBDC, greater adoption and use of real-time gross settlement (RTGS) systems, and facilitating the growth of interoperable stablecoin payment rails “by creating the right regulatory framework for these new types of networks.”
 
Finally, the International Monetary Fund (IMF) has released a new paper entitled, “The Rise of Digital Money”. In brief, the paper reviews the forces of change driving the adoption of digital forms of money; considers the policy implications and new policy questions that arise; clarifies the IMF’s role in tackling these questions; outlines a strategy to do so; and provides initial estimates of the resources necessary to deliver this vision.
 
Capital Clues
 
Below is latest intelligence the IPA has received on recent activity on Capitol Hill:

• As we kick off August, House Members are wondering how long their recess will last while Senators contemplate when theirs will begin. Last week’s 67-32 vote to proceed on the Bipartisan Infrastructure Framework (BIF) has created a rare opportunity for the White House and Congress to enact a major part of President Biden’s agenda, and Democrats are eager to seize the momentum.  Majority Leader Schumer remains steadfast in his commitment to pass both the BIF as well as the budget resolution before he will let his Members leave, so expect the Senate to blow past this Friday’s targeted start of the August recess.
• Meanwhile, House Democrats departed last week unable to find unity on an effort to extend the federal eviction moratorium, foreshadowing upcoming challenges House Democratic Leadership will face preventing progressives and moderates from fracturing on the Biden agenda. House Members are expected to return at some point in the second half of August, having been advised by Speaker Pelosi that they are “on call”.  It’s still unclear whether the House will take up a Senate-passed BIF before they’ve completed a reconciliation package, but at the very least, the House will need to return to pass a budget resolution to start the reconciliation process. 

 
California DFPI Enters in MOU with EWA Company
 
The IPA has learned that, in July, the California Department of Financial Protection and Innovation (DFPI) entered into a Memorandum of Understanding (MOU) with an earned wage access (EWA) company called Immediate Solutions. In brief, the MOU requires, among other things, that Immediate comply with a quarterly reporting requirement, periodic onsite examinations, a set of best practices, and that they include new specified language in their consumer disclosure. Immediate also agreed to refrain from representing to its customers that it is supervised, approved, or endorsed by DFPI in any way.
 
A copy of the MOU can be accessed here.
 
IPA Draft Letter to the California Financial Regulator on EWA
 
The IPA has drafted a letter to the California Department of Financial Protection and Innovation (DFPI) on earned wage access (EWA). In brief, the letter provides an overview of the industry, discusses principles for regulation going forward that the IPA believes would appropriately balance consumer protection and innovation, and expresses the IPA’s desire to being an ongoing dialogue with DFPI on EWA.  
 
The IPA has released a revised draft of the letter and is currently working to incorporate additional feedback received from members. 

New Federal Laws
 
S.J. Res 15 – A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of Currency relating to "National Banks and Federal Savings Associations as Lenders" (True Lender Congressional Review Act Resolution)
Summary: This disapproval resolution invalidates the OCC’s True Lender Rule, which addressed lending arrangements between banks and non-bank third party lenders. Additionally, the Resolution prevents the OCC from issuing the Rule, or one like it, again. 
Status: Signed by the President on 6/30/20.
Sponsor: Sen. Chris Van Hollen (D-MD)
 
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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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)

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

IPA Podcast: IPA’s Government Update for July 2021
 
Capitol Hill has been taking an active interest in the payments industry. Overdraft, buy now pay later products, and even a possible computer chip shortage have all drawn lawmakers’ attention. 
 
On top of all that, the Durbin Amendment has resurfaced as a topic of conversation, and there are rumors that it may be extended to other types of payments. 
 
We cover all of this and more in our latest podcast episode with the IPA’s CEO, Brian Tate, and our Government Relations Director, Grant Hannah.
​
To learn more about the forces shaping the payments industry, we encourage our listeners to join the IPA for its Summer of Learning Webinar series, where we talk with regulators, industry leaders, and analysts about what they see coming in the world of payments innovation. 
 
Listen here!

IPA Summer of Learning
Please join the IPA on July 27th when we will be joined by the Honorable Warren Davidson, U.S. Representative (R-OH).  U.S. Representative Davidson, the Ranking Member of the House Financial Services Committee’s Task Force on Financial Technology, will discuss cryptocurrencies, blockchains, and the future of payments. This conversation is only for members of the IPA. 
Speaker:  Honorable Warren Davidson, U.S. Representative
When: July 27th, 2pm Eastern

Register Now

FEDERAL RESERVE (THE FED)
 
Federal Banking Agencies Request Comment on Proposed Risk Management Guidance for Third-Party Relationships
 
On July 13, three federal bank regulatory agencies (FDIC, Federal Reserve, and OCC) requested public comment on proposed guidance designed to help banking organizations manage risks associated with third-party relationships, including relationships with financial technology-focused entities. The proposed guidance is intended to assist banking organizations in identifying and addressing the risks associated with third-party relationships and responds to industry feedback requesting alignment among the agencies with respect to third-party risk management guidance.
 
A copy of the proposed guidance can be found here. Comments are due by September 17, 2021. 
 
CONSUMER FIANCIAL PROTECTION BUREAU (CFPB)
 
CFPB Releases Blog on Buy Now Pay Later Products
On July 8, the CFPB released a blog on Buy Now Pay Later (BNPL) products. This represents some of the first public statements we’ve heard from the CFPB on BNPL. The blog post discusses how BNPL works generally, how late fees work, consumer protection and credit reporting issues, and more. 
 
When it comes to consumer protection, the blog highlights that buy now pay later BNPL loans currently lack the consumer protections that apply to other forms of payment. It also discusses issues consumer could face when returning merchandise bought with a BNPL loan.
 
It is expected that the CFPB as well as other regulators and Congress will increasingly take closer looks at BNPL products. The full blog post can be accessed here. 

President Biden Issues Executive Order on Competition
 
On July 9, President Biden signed an Executive Order (EO) aimed at promoting competition in the American Economy. The EO includes 72 initiatives that will direct more than a dozen federal agencies to address issues of competition across the economy. The White House says that President Biden is taking this action to, “…reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses.” 
 
Included in the EO is a “banking and consumer finance” section which discusses branch closures and consolidation in the banking industry and difficulties faced by consumers who want to move banks due to issues with the portability of financial transaction history data. 
 
The EO seeks to address these issues by:

• Encouraging DOJ and the agencies responsible for banking (the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency) to update guidelines on banking mergers to provide more robust scrutiny of mergers.
• Encouraging the Consumer Financial Protection Bureau (CFPB) to issue rules allowing customers to download their banking data and take it with them.

 
In addition to the provisions around bank mergers and the portability of financial transaction history data, there is an additional requirement that the Secretary of the Treasury submit a report to the Chair of the White House Competition Council, not later than 270 days after the date of the order, assessing the effects on competition of large technology firms’ and other non‑bank companies’ entry into consumer finance markets. Given the 270-day timeframe, the report would come out no later than early April of next year.
 
A fact sheet with a full overview of the EO can be found here.
 
Senate Banking Republicans Send Letter to CFPB Nominee
 
On July 13, all Republican members of the Senate Banking Committee sent a letter to CFPB Director Nominee Rohit Chopra expressing their concern, “…with [his] refusal to respond to a congressional request seeking information about potential violations of law at the Consumer Financial Protection Bureau (CFPB).” Senate Banking Republicans had previously sent Mr. Chopra and CFPB Acting Director Dave Uejio a letter asking them to respond to reports last month that senior career civil servants at the CFPB were being pressured to quit to make room for political allies to be installed at those positions.
 
A copy of the letter can be accessed here. 
 
House Republicans Request Information from CFPB Acting Director
 
On July 15, Republican Members of the House Financial Services sent a letter to CFPB Acting Director David Uejio requesting additional information on actions he’s taken related to issuing new rules, guidance, and policy statements; delaying the implementation date of multiple major rulemakings; reversing and rescinding policy statements and guidance; and undertaking nine enforcement actions against financial services companies. The members additionally express concerns that, “…the CFPB is conducting business as usual without a Senate-confirmed Director and without proper oversight.”
 
In a separate letter, Ranking Member Patrick McHenry (R-NC) sent a letter to Chairwoman Waters requesting that the Committee hold an oversight hearing with Acting Director Uejio. 
 
Fed Chair Jerome Powell Testifies Before Congress
 
Fed Chair Jerome Powell provided his semiannual testimony before the House Financial Services Committee and Senate Banking Committee on July 14th and July 15th respectively. Inflation, stablecoins, and central bank digital currencies (CBDC) were common subjects of Members’ questions. Chair Powell indicated that the Fed believes that the recent rise in inflation is temporary and that continued economic recovery and growth would bring it down. In addition, Powell mentioned that the Fed’s report on CBDCs will likely be released sometime in September. Finally, he was asked about stablecoins a number of times and, in his responses, discussed their similarities with deposit accounts and money market accounts and called for a similar regulatory framework to be applied. 
 
Capital Clues
 
Below is latest intelligence the IPA has received on recent activity on Capitol Hill:

• The nomination of Rohit Chopra to be the next Director of the CFPB has remained in limbo between the Banking Committee and the Senate floor for nearly four months, but we still expect Leader Schumer to move his nomination, possibly before the August recess or when they return in September.
• On Monday, July 19, House Members joined Senators in DC for what could be a pivotal stretch for two major Biden Administration priorities. Early August recess plans could be impacted should Democratic leaders need more time to secure wins before the extended annual recess next month. 
• As Senator Schumer works to build Democratic support for a $3.5 trillion budget resolution that could pave the way for a second reconciliation package to fund President Biden’s American Families Plan, he announced plans to file cloture on a motion to proceed to the $1.4 trillion Bipartisan Infrastructure Framework (BIF), which has yet to be converted into legislative text.  That would set up a cloture vote on the MTP on Wednesday, July 21. 

 
IPA Draft Letter to the California Financial Regulator on EWA
 
The IPA has drafted a letter to the California Department of Financial Protection and Innovation (DFPI) on earned wage access (EWA). In brief, the letter provides an overview of the industry, discusses principles for regulation going forward that the IPA believes would appropriately balance consumer protection and innovation, and expresses the IPA’s desire to being an ongoing dialogue with DFPI on EWA.  
 
The IPA held a call to review and discuss our initial draft of the letter and is currently working to incorporate feedback received from members. 

New Federal Laws
 
S.J. Res 15 – A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of Currency relating to "National Banks and Federal Savings Associations as Lenders" (True Lender Congressional Review Act Resolution)
Summary: This disapproval resolution invalidates the OCC’s True Lender Rule, which addressed lending arrangements between banks and non-bank third party lenders. Additionally, the Resolution prevents the OCC from issuing the Rule, or one like it, again. 
Status: Signed by the President on 6/30/20.
Sponsor: Sen. Chris Van Hollen (D-MD)
 
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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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)

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

IPA Podcast: Payments for Good with Blackhawk Network: How a pandemic led to a new vertical for the company
 
The pandemic created problems for individuals, governments, and businesses, but as the old saying goes, every problem brings new opportunities.  
 
For Blackhawk Network, that opportunity began when it channeled its payments expertise into helping distribute relief money for governments and nonprofits. It used both closed-loop and open-loop prepaid cards as a way to deliver aid. The plastic and virtual cards were used to replace checks so that people could get access to funds quickly and inexpensively.  
 
As the pandemic begins to subside, Blackhawk plans to continue working to deliver funds to vulnerable populations. The company has created a new vertical that it calls Payments for Good to work with governments and nonprofits who need new ways to disburse money. 
 
In this episode, we talk with Tyler Gentry, the director of Payments for Good, about the work that led to its creation and the company’s future plans.  
 
Listen here!

IPA Summer of Learning
Join Us Thursday
The Summer Learning Series is provided as a complimentary benefit to the payments community. There is no cost to register for these events. 
 
Join the IPA at our next Summer of Learning event with special guest, Ron Shevlin. 
Ron is the Managing Director of Fintech Research at Cornerstone Advisors, the author of the book Smarter Bank, and a Senior Contributor at Forbes where he authors the Fintech Snark Tank blog.

Please join us on Thursday, July 8th at 2 pm (EST) as Ron shares his insights on the innovations occurring in the financial services marketplace and where things might be headed in the future.
 
Speaker: Ron Shevlin, Forbes
When: July 8th, 2pm Eastern
 
Register Now

FEDERAL RESERVE (THE FED)
 
Federal Reserve Board Extends Comment Period on Proposed Changes to Regulation II
 
On June 22, the Federal Reserve Board announced that it will extend until August 11, 2021, the comment period for its proposed changes to Regulation II regarding network availability for card-not-present debit card transactions. Originally, comments were due by July 12, 2021.
 
The IPA sent a letter to the Federal Reserve Board requesting an extension of the comment period on June 11th. In addition, the IPA is working to incorporate feedback received from IPA members into our larger comment letter to the Fed on the proposed rule.
 
Federal Reserve Files Motion to Dismiss / Motion to Transfer N.D. Retailer Interchange Litigation
 
On July 2, the Federal Reserve filed a motion to dismiss or, in the alternative, a motion to transfer to D.C. the litigation brought by North Dakota retailers in the U.S. District Court for the District of North Dakota challenging the Federal Reserve’s Reg. II rulemaking. In the motion, the Fed moves to dismiss or transfer based on a lack of subject matter jurisdiction or failure to state a claim on grounds that the six-year limitations period applicable to this action under the Administrative Procedure Act has expired. In addition, in support of its motion to transfer, the Fed cites that a transfer is appropriate in this case because the ND retailers complaint raises virtually identical claims to those that were fully litigated in litigation brought by the NRF and others previously challenging the Fed’s Reg. II rulemaking in 2011 in the U.S. District Court for the District of Columbia and appealed to the D.C. Circuit, which ordered a limited remand for additional clarification by the Board on one narrow issue without vacating any part of the Final Rule. 
 
The Fed’s brief can be found here. 
 
CONSUMER FIANCIAL PROTECTION BUREAU (CFPB)
 
CFPB Releases July CFPB Consumer Complaint Bulletin
 
On July 1, the Consumer Financial Protection Bureau (CFPB) released a new complaint bulletin covering several areas related to relief provided in response to the COVID-19 pandemic. Specifically, the bulletin focuses on consumer complaints around EIPs, eviction protections, and student loan servicing. 
 
The full bulletin can be accessed here. 
 
Financial Crimes Enforcement Network (FinCEN)
 
FinCEN Completes Assessment on the Use of No-Action Letters
 
On June 30, the Financial Crimes Enforcement Network announced that it has completed a report on its assessment of whether to establish a process for the issuance of no-action letters in response to inquiries concerning the application of the Bank Secrecy Act (BSA) and other anti-money laundering and countering-the-financing-of-terrorism laws to specific conduct. Pursuant to Section 6305 of the Anti-Money Laundering Act of 2020 (AML Act), the report was delivered on June 28, 2021, to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services.  FinCEN’s assessment included consultation with the Attorney General, the Federal functional regulators, State bank supervisors, State credit union supervisors, and other Federal agencies, as required by the AML Act.  
 
“FinCEN concludes that a no-action letter process would be a useful complement to its current forms of regulatory guidance and relief,” said Acting Director Michael Mosier.  “FinCEN looks forward to continuing to engage with our government partners and the public during a future rulemaking process to ensure all constructive feedback is considered on this important issue.”
 
A copy of the report can be found attached and additional information can be found here.
 
FinCEN Issues First National AML/CFT Priorities
 
On June 30, the Financial Crimes Enforcement Network issued the first government-wide priorities for anti-money laundering and countering the financing of terrorism (AML/CFT) policy (the “Priorities”), following consultation with other relevant Department of the Treasury offices, as well as Federal and State regulators, law enforcement, and national security agencies. The Priorities identify and describe the most significant AML/CFT threats currently facing the United States. In no particular order, these include corruption, cybercrime, domestic and international terrorist financing, fraud, transnational criminal organizations, drug trafficking organizations, human trafficking and human smuggling, and proliferation financing.  FinCEN today also issued two statements (attached) to provide guidance to covered institutions on how to approach the Priorities.  
 
Additional information can be found here.

July House Financial Services Committee Hearing Schedule Announced
On June 28, House Financial Services Committee Chairwoman Maxine Waters (D-CA) announced the Committee hearing schedule for the month of July. Highlights from the schedule can be found below and the full schedule can be found here.
 

• July 14 at 12:00 PM ET: The full Committee will convene for a virtual hearing entitled, “Monetary Policy and the State of the Economy.” (Fed Chair Jerome Powell will appear)
• July 16 at 12:00 PM ET: The Task Force on Artificial Intelligence will convene for a virtual hearing entitled, “I Am Who I Say I Am: Verifying Identity while Preserving Privacy in the Digital Age.”
• July 21 at 10:00 AM ET: The Subcommittee on Consumer Protection and Financial Institutions will convene for an in-person hearing entitled, “Banking the Unbanked: Exploring Private and Public Efforts to Expand Access to the Financial System.”
• July 27 at 10:00 AM ET: The Subcommittee on National Security, International Development and Monetary Policy will convene for an in-person hearing entitled, “The Promises and Perils of Central Bank Digital Currencies.”

 
Rep. Maloney (D-NY) Introduces Overdraft Legislation
On June 30, Rep. Carolyn Maloney (D-NY) announced the introduction of the Overdraft Protection Act of 2021. This bill is aimed at limiting overdraft fees and would establish a set of practices for overdraft coverage programs. Rep. Maloney has introduced a version of this legislation since 2009.
 
Specifically, the Overdraft Protection Act of 2021 would:
 

• require that fees be “reasonable and proportional” to the cost of processing these transactions and the amount of the overdraft;
• prevent institutions from re-ordering transactions to artificially increase their fees;
• limit the number of fees that can be charged to 1 per month and 6 per year;
• require that consumers proactively opt-in to overdraft programs – rather than automatically being enrolled;
• improve transparency and disclosures; and
• prohibit charging overdraft fees for “debit holds” that exceed actual transaction amounts, among other strong measures.

 
Legislative text has not been made available yet but will likely be made available here in the next few business days. In the meantime, the bill as introduced in the 116th Congress can be found here.
 
Capital Clues
Below is latest intelligence the IPA has received on recent activity on Capitol Hill:
 

• The Senate is in recess until Monday, July 13. The Senate will begin a four-week session upon its return.
• The House will be in recess July 5-9.
• Significant progress was made the week of June 22 when a bipartisan group of senators, together with President Biden, announced agreement on an infrastructure framework.  President Biden’s support for the deal was clouded, however, when just hours later, he indicated that his support for the deal is contingent upon passage of a larger multi-trillion-dollar budget reconciliation bill.  Things appeared back on track over the weekend with the key negotiators after Biden issued a statement on Saturday clarifying his comments.  
• Beyond infrastructure, there are three policy areas which are generating bipartisan collaboration at the moment: (1) immigration reform; (2) police reform; (3) and China competitiveness. A bill relating to China competitiveness (U.S. Innovation and Competition Act) has cleared the Senate and components have begun moving through the House. Notably, the bill provides $52 billion in emergency subsidies for semi-conductor manufacturers. In addition, there was a bipartisan breakthrough announced on policing reform recently, though some sticking points still remain. Bipartisan discussions continue on immigration reform.

New Federal Laws
 
S.J. Res 15 – A joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Office of the Comptroller of Currency relating to "National Banks and Federal Savings Associations as Lenders" (True Lender Congressional Review Act Resolution)
Summary: This disapproval resolution invalidates the OCC’s True Lender Rule, which addressed lending arrangements between banks and non-bank third party lenders. Additionally, the Resolution prevents the OCC from issuing the Rule, or one like it, again. 
Status: Signed by the President on 6/30/20.
Sponsor: Sen. Chris Van Hollen (D-MD)
 
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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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 purpose
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)
 

​​​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

​IPA Podcast: Is Green Dot the Model for Fintech Evolution?
As the fintech industry continues to innovate, one of the big questions is where does it go from here? 

The future direction of the industry may be best represented by a company that has gone through its own evolution. Green Dot is one of the original Fintechs. It started with prepaid cards sold mostly through retail and has since evolved into a leader in the digital bank space. Its change from a prepaid card program manager to digital banking company could foreshadow the future.  
​
In this episode, we talk with Greg Quarles, president of Green Dot Bank, about how the company has evolved to work with tech partners like Apple, Google, and Uber. We also discuss the advantages of having a bank charter, and why other fintechs will need to consider adding products like lending if they want to thrive in the long run. 
 
Listen here!

FEDERAL RESERVE (THE FED)
 
IPA Letter & Federal Reserve Board Comment Period Extension on Proposed Changes to Regulation II
 
On June 11, the IPA submitted a letter to the Board of Governors of the Federal Reserve System in response to the Notice of Proposed Rulemaking concerning Debit Card Interchange Fees and Routing issued by the Board and published in the Federal Register on May 13, 2021 (the "Proposed Rule").  While the Proposed Rule has an initial deadline for comments of July 12, 2021, the letter requests that the Board extend the deadline for an additional 30-day period.  
 
The Federal Reserve Board subsequently announced on June 21 that it will extend until August 11, 2021, the comment period for its proposed changes to Regulation II. 
 
The IPA is still working with our members to finalize our larger comment letter to the Fed on the proposed rule and will have a revised draft to share soon. In the meantime, the IPA extension request can be found here. 
 
CONSUMER FIANCIAL PROTECTION BUREAU (CFPB)
 
CFPB Issues Spring 2021 Rulemaking Agenda
 
On June 11, the CFPB issued published their Spring 2021 Agenda as part of the Spring 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions. The agenda lists the regulatory matters that the Bureau is currently pursuing under interim leadership pending the appointment and confirmation of a permanent Director. The permanent Director’s changes to the regulatory agenda will be reflected in the Fall 2021 Unified Agenda.
 
A brief summary of the Bureau’s planned regulatory activity can be found below. The full Agenda can be accessed here. 
 
CFPB Planned Regulatory Activities:
 

• Small business lending data – Section 1071 of the Dodd-Frank Act requires financial institutions to collect, report, and make public certain information concerning credit applications made by women-owned, minority-owned, and small businesses. The Bureau anticipates issuing a Notice of Proposed Rulemaking on Sec. 1071 in September 2021.
• Availability of electronic consumer financial account data – The Bureau is considering a rulemaking to implement section 1033 of the Dodd-Frank Act to address the availability of consumer financial account data in electronic form.  
• Property Assessed Clean Energy (PACE) financing – Section 307 of the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) requires that the Bureau prescribe certain regulations relating to PACE financing. In March 2019, they released an ANPRM and are continuing to engage with stakeholders and collect information for the rulemaking, including by collecting quantitative data on the effect of PACE on consumers’ financial outcomes.
• Standards for Automated Valuation Models (AVMs) – The Bureau is pursuing an interagency rulemaking with the Board of Governors of the Federal Reserve System (Board), the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Federal Housing Finance Agency to develop regulations to implement the amendments made by the Dodd-Frank Act to the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) concerning appraisals.
• Facilitating transition away from LIBOR index – The Bureau is continuing a rulemaking to address the anticipated expiration of the LIBOR index, which the UK Financial Conduct Authority has stated that it cannot guarantee the publication of beyond June 2023. They issued a issued a proposed rule in June 2020 and expect to issue a final rule in January 2022.
• Reviewing existing regulations 
• Market monitoring

 
FEDERAL DEPOSIT INSURANCE COPORATION (FDIC)
 
FDITECH Launches Tech Sprint to Reach More Unbanked People
 
On June 16, the FDIC announced a ‘tech sprint’ entitled, “Breaking down Barriers: Reaching the Last Mile of Unbanked U.S. Households”, which is designed to explore new technologies and techniques that would help expand the capabilities of banks to meet the needs of unbanked individuals and households. This tech sprint will challenge participants to identify better resources and tools to help banks get unbanked households into the banking system and to keep them banked. Banks, non-profit organizations, academic institutions, private sector companies, and others are invited to participate. 
 
Additional information can be found in the email below and on the FDIC’s website.
 

Democratic House Members Send Letter to JP Morgan Chase on Overdraft
 
On June 16, Representatives Carolyn B. Maloney (D-NY), Kathleen Rice (D-NY), Gregory Meeks (D-NY), and Tom Suozzi (D-NY) sent a letter to JPMorgan Chase & Co. (JPM) Chairman and Chief Executive Officer Jamie Dimon urging him to refund overdraft fees that JPM charged to consumers during the COVID-19 pandemic and to stop charging these fees going forward. 
 
The full letter can be accessed here.
 
Waters Announces Digital Assets Working Group
 
On June 16, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Committee on Financial Services, announced that she has organized a Digital Assets Working Group of Democratic Members. According to the Committee, the Digital Assets Working Group will focus on making sure there is responsible innovation in the cryptocurrency and digital asset space. Further, Members are meeting regularly with experts and government officials to learn about the challenges and promise of digital assets. Finally, Members plan to work together on legislation and policy solutions on such matters as cryptocurrency regulation, the use of blockchain and distributed ledger technology, and the possible development of a U.S. Central Bank Digital Currency.
 
Additional information can be found here.
 
Capital Clues
 
Below is latest intelligence the IPA has received on recent activity on Capitol Hill:

• The House Financial Services Committee (HFSC) will hold its monthly markup on Wednesday of next week.  The committee has no additional activity scheduled.   

• House leaders will attempt to roll back the OCC’s True Lender rule in what could turn out to be a tight vote.  
• Federal Reserve Chairman Jerome Powell is expected to testify on consecutive July days for Humphrey-Hawkins hearings.    
• Despite Lina Kahn’s confirmation, there are no imminent plans to move Rohit Chopra’s CFPB nomination this month.  Leader Schumer has filed cloture on two nominees and on the For the People Act wrap up the Senate's work before the Independence Day recess. 

 
New Jersey Senate Bill 3498 Favorably Reported from Committee
 
On June 16, the New Jersey Senate Commerce Committee amended and favorably reported Senate Bill 3498 (Gift Cards). Updated bill text can be found here and an updated summary can be found below. In addition, the IPA sent our letter of opposition, which had been previously submitted to the bill’s sponsor, to the full Committee in advance of the hearing. 
 
SB 3498 Summary
 
Requires that gift card issuers: 

• Immediately freeze the funds on a gift card upon receiving a report of fraud; 
• Provide a full refund to the purchaser after the conclusion of a fraud investigation, if fraud was reported by the purchaser within two weeks of purchase or issuance of the gift card, provided, however, the gift card issuer shall conclude its investigation not more than two weeks after the date the instance of fraud was reported; and
• Comply with new record keeping and disclosure requirements.

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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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 purpose
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: Introduced and referred to the House Committee on Financial Services on 6/17/21. Scheduled for mark up on 6/23/21.
Sponsor: Rep. Richie Torres (D-NY)

​​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

IPA Podcast: A Pandemic Can Change All the Rules When it Comes to Fraud Prevention
 
Over the last 18 months, the dramatic changes in the ways that people live, work, and pay have meant that fraud prevention rules that were once very effective have lost some of their power.  
 
In the latest episode of the IPA Payments Pod, we talk with Brian Grech, vice president of sales and marketing for Deep Labs, which uses persona-based artificial intelligence to predict behavior and prevent fraud. We cover how the pandemic created new risks that were not covered by old models, so what once looked like fraud could be a legitimate transaction, and what once looked legitimate could be fraud.  
We also talk about what artificial intelligence is and how it can help companies adapt to rapidly changing environments. As we come out of the pandemic, the business environment is evolving rapidly. So, as we adjust to a new normal, companies will once again need to think ahead and figure out what lessons still apply, and what has changed now that the pandemic is over.  
 
Listen now!
​

FEDERAL RESERVE (THE FED)
 
Federal Reserve Board Invites Public Comment on Proposed FedNow Rule
On June 1, the Federal Reserve Board issued a request for comment on a proposed rule to govern funds transfers over the Federal Reserve Banks' FedNow℠ Service. The FedNow Service will support instant payments in the United States and is expected to be available in 2023.
 
The proposed rule would establish a new and comprehensive set of rules governing funds transfers over the FedNow Service and set out the legal rights and obligations of the Reserve Banks and FedNow Service participants. Many of the concepts in the proposed rule are similar to existing provisions that govern the Fedwire Funds Service, which is the payments service currently operated by the Federal Reserve System.
 
Comments are due within 60 days of the proposal's publication in the Federal Register. Additional information can be found here.
 
CONSUMER FIANCIAL PROTECTION BUREAU (CFPB)
 
Scheduling Order in PayPal Case Appeal Issued by DC Appeals Court
The United States Court of Appeals for the District of Columbia Circuit has issued a scheduling order for the appeal filed by the CFPB in the PayPal case. The order lays out the timeline of filings for the appeal. As a reminder, the CFPB filed notice with the United States District Court for the District of Columbia on March 1st that they appeal Judge Richard Leon’s ruling in the case. 
 
In summary, the scheduling order requires that the CFPB files its initial brief by August 2, 2021, and that PayPal files its initial brief by September 29, 2021. Additional documents will be due in early-mid November, with final briefs being due on November 24, 2021. 
 
A copy of the scheduling order can be found here. 
 
CFPB issues Electronic Fund Transfers FAQs on compliance aid webpage
On June 4, the CFPB issued Electronic Fund Transfers Frequently Asked Questions (FAQs). The FAQs address the unauthorized transfer and error resolution provisions under the Electronic Fund Transfer Act and Regulation E, including situations when a consumer is fraudulently induced by a third party to provide their account information or private network rules conflict with the regulation.

The FAQs can be accessed here. 

OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC)
 
Appeals Court Issues Ruling in OCC FinTech Charter Lawsuit
 
On June 3, the U.S. Court of Appeals for the Second Circuit issued a ruling in the New York Department of Financial Services’ (DFS) suit challenging the Office of the Comptroller of the Currency’s (OCC) decision to begin accepting applications for special-purpose national bank charters from FinTechs engaged in the “business of banking,” including those that do not accept deposits. In brief, the Court ruled in favor of the OCC and reversed a lower court ruling that blocked the OCC from issuing charters to FinTechs on the grounds that the DFS failed to show that the OCC’s decision caused it to suffer an actual or imminent injury and that DFS’s claims are constitutionally unripe for substantially the same reason.
 
The full decision can be accessed here. 

June Congressional Hearings of Note
 

• June 9 at 2:30 PM ET: The Senate Banking Subcommittee on Economic Policy will convene for a virtual hearing entitled, “Building A Stronger Financial System: Opportunities of a Central Bank Digital Currency.”
• June 15 at 10:00 AM ET: The House Financial Services Task Force on Financial Technology will convene for a virtual hearing entitled, “Digitizing the Dollar: Investigating the Technological Infrastructure, Privacy, and Financial Inclusion Implications of Central Bank Digital Currencies.” 
• June 30 at 10:00 AM ET: The House Financial Services Subcommittee on Oversight and Investigations will convene for a virtual hearing entitled, “America on “FIRE”: Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?”

 
Capital Clues
 
Below is latest intelligence the IPA has received on recent activity on Capitol Hill:
 

• The Senate returns this week while the House remains in a committee work period. Both the House and the Senate will begin a busy period with dozens of hearings and markups scheduled between now and the start of the July Fourth recess. 
• Negotiations on a comprehensive infrastructure proposal continue between Senate Republicans and the Biden Administration. While both sides have expressed some degree of optimism towards achieving a bipartisan compromise, there is still a considerable amount of daylight between what House and Senate Republicans would be willing to agree to and where the Biden Administration currently stands. 
• The Democrats expanded their slim majority in the House last Tuesday with the election of Melanie Stansbury to New Mexico’s 1st Congressional District.  Stansbury defeated State Senator Mark Moores (R) in a special election for the seat previously held by Interior Secretary Deb Haaland.  As a result, the Democrats now maintain a 220-211 majority.  There are currently four vacant seats in the House.

​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: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
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 purpose
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)

​​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

IPA Podcast: Regulators at All Levels Have Been Busy, and We have a Round Up for You.
The regulatory environment for payments has become very active over the past few weeks, with proposed rules, congressional hearings, and even lawsuits. In this episode of the IPA Payments Pod, our CEO, Brian Tate, and our Government Relations Director, Grant Hannah, help to make sense of everything that has been happening.  

There are proposed rules on transaction routing and advertising FDIC insurance. There is a lawsuit over interchange fees. And a major fintech was sanctioned in two states for its advertising. This is all just the tip of the iceberg.  
Listen now!
​

IPA Financial Crimes Task Force Call: Mitigating Losses from Social Engineering, Victim Assisted,
& Gift Card Fraud
 
We often think of cyber criminals as expert hackers who break into systems using technical expertise. But many times, the danger lies in helpful employees, tricked customers, or gifts with dark surprises. Join us for a session on Mitigating Losses from Social Engineering, Victim Assisted, & Gift Card Fraud, led by Nigel Carty, Director of Fraud and Risk at InComm Financial Services Inc. 
 
Speaker
Nigel Carty
Director; Fraud and Risk Department,
InComm Financial Services, Inc.
 
This call is open to any IPA Member. Please register online, call details will be provided in the confirmation email, and share this with any of your colleagues who may be interested.
 
When: May 27 at 2pm Eastern
Who: IPA Members Only
 
Please login to your IPA account to register. Need help or have questions? Email us. 

FEDERAL RESERVE (THE FED)
 
Federal Reserve Chair Powell Says Fed to Issue Report on U.S. Digital Currency
 
On May 20, the Federal Reserve Board Chair Jerome Powell announced that the Fed will issue a discussion paper this summer outlining their current thinking on digital payments, with a particular focus on the benefits and risks associated with CBDC in the U.S. context. He additionally announced that, as part of this process, they seek public comment on issues related to payments, financial inclusion, data privacy, and information security.
 
Chair Powell further stated that the Federal is committed to hearing a wide range of voices on this important issue before making any decision on whether and how to move forward with a U.S. CBDC, taking account of the broader risks and opportunities it could offer. Finally, he stated that the Fed expects to play a leading role in developing international standards for CBDCs, engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process.
 
Additional information can be found here.
 
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
 
FDIC Issues Request for Information on Digital Assets
On May 17, the Federal Deposit Insurance Corporation (FDIC) released a request for information and comment on digital assets. The FDIC says it recognizes that there are novel and unique considerations related to digital assets, and this RFI is intended to help inform the FDIC’s understanding in this area. Specifically, the FDIC is seeking input on current and potential use cases involving IDIs and their affiliates and risk and compliance management in conducting such activities. 
Comments are due by July 16, 2021. Additional information can be found here. 
 
Agencies Extend Comment Period on Request for Information on Artificial Intelligence
On May 17, five federal financial regulatory agencies announced they will extend the comment period on the request for information (RFI) on financial institutions’ use of artificial intelligence (AI) until July 1, 2021.

The Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) issued the RFI on March 29, 2021 and are seeking information from the public on how financial institutions use AI in their activities, including fraud prevention, personalization of customer services, credit underwriting, and other operations. More specifically, the RFI seeks comments to better understand the use of AI, including machine learning, by financial institutions; appropriate governance, risk management, and controls over AI; and challenges in developing, adopting, and managing AI.

Additional information can be found here. 
 
FDIC Issues Proposed Rule Regarding False Advertising, Misrepresentations About Insured Status, and Misuse of the FDIC’s Name or Logo
On April 22, the Federal Deposit Insurance Corporation (FDIC) issued a proposed rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo. This statutory authority allows the FDIC to bring formal enforcement actions, such as cease and desist orders or civil money penalties, against individuals or entities for violations.

The proposed rule describes the process by which the FDIC would identify and investigate potential violations, and the procedures it would follow, when formally and informally enforcing the statutory prohibitions. The proposed rule would also create a central point-of-contact where the public could report or make inquiries about potential violations. Additionally, the proposed rule would establish a more transparent process that would promote stability and public confidence in FDIC deposit insurance and the nation’s financial system.

The IPA is in the process of working with our members to finalize a draft comment letter in response. If you’d like a copy of the draft comment letter, please contact Grant Hannah (ghannah@ipa.org). Additional information can be found here. 
 
OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC)
 
Acting Comptroller of the Currency Michael Hsu Calls for Greater Cooperation on Chartering Issues and Outlines Priorities
 
In testimony before the House Financial Services Committee on May 19, Acting Comptroller of the Currency Michael Hsu identified four issues requiring the agency’s immediate attention: (1) guarding against complacency by banks, (2) reducing inequality in banking, (3) adapting to digitalization, and (4) acting on the risks that climate change presents to the financial system.
 
Further, when discussing “adapting to digitalization” in more detail, Acting Comptroller Hsu identified the issue of charters as a topic that is relevant in this context. Specifically, he called for greater interagency coordination amongst the OCC, FDIC, Fed, and state regulatory agencies to find a way to consider how fintechs and payments platforms fit into the banking system.
 
Additional information can be found here. 

​Capital Clues
 
Below is latest intelligence the IPA has received on recent activity on Capitol Hill related to financial services:
 

• Sen. Dick Durbin (D-IL) is working on legislation that would apply similar limitations on credit interchange as the Durbin Amendment has applied to debit interchange. Specifics and timeline are unclear at this point, but indications are coming from the Hill that the legislation could focus on routing and potentially prohibit network exclusivity for credit routing. Sen. Durbin is also thought to be courting Sen. Kevin Cramer (R-ND) as a co-sponsor. 
• Chief executive officers serving at the nation’s largest financial institutions will appear before both the Senate Banking Committee and House Financial Services Committee on Wednesday and Thursday, respectively.  The committees’ members are likely to focus on the banks’ response to consumers during the pandemic, the banking system’s proper role in society, their profitability relative to average Americans, and their role in promoting environmental, social and governance goals and financial innovation.  
• Rep. French Hill was tapped to lead Republicans on the Financial Services Subcommittee on Housing, Community Development, and Insurance.  That move created a vacancy in the ranking member slot on the National Security, International Development and Monetary Policy Subcommittee, which was filled by Rep. Andy Barr.  Rep. Tom Emmer will serve as ranking member on the Subcommittee on Oversight and Investigations Subcommittee and Warren Davison will move up to head the Financial Technology Task Force for committee Republicans.  

 

​New Federal Laws
 
None.
 
Pending Federal Bills
 
H.R.963 - Forced Arbitration Injustice Repeal (FAIR) Act
 
Summary: This bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute.
 
Status: Referred to the Subcommittee on Antitrust, Commercial, and Administrative Law on 04/23/2021.
 
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 purpose
 
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)

​​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

IPA Podcast: Customer Disputes During COVID and Beyond: Ubiquity discusses setting up and managing dispute processes
 
As online shopping and remote payments grew over the past year, so did the number of customer disputes over payments. While many of the disputes were legitimate, some were fraudulent – either by people attempting to get out of paying for something they bought or by organized rings of criminals attempting to hack a company through social engineering.  
In this episode, we talk about these problems and how payments companies can manage them with Corey Besaw, the banking operations president for Ubiquity.

He talks about best practices for handling disputes including: 

1. Prioritizing dispute cases, 
2. Setting investigation thresholds,  
3. Working with third parties such as ATM operators and merchants. 

He brings together the experiences of many of their customers and talks about some of the common pitfalls and practices that have worked to avoid them. He also gets into considerations around using tools like artificial intelligence.
Listen now!
​
IPA Summer of Learning

FEDERAL RESERVE (THE FED)
 
Federal Reserve Board invites public comment on proposed changes to Regulation II regarding network availability for card-not-present debit card transactions and publishes a biennial report containing summary information on debit card transactions in 2019
 
On May 7, the Federal Reserve Board proposed changes to Regulation II (Debit Card Interchange Fees and Routing) to clarify that debit card issuers should enable, and allow merchants to choose from, at least two unaffiliated networks for card-not-present debit card transactions, such as online purchases. The Board views these clarifications of Regulation II's existing requirements as necessary in light of information indicating that often only one network is enabled for such transactions.
 
Next, the Board also published a report on debit card transactions in 2019, including information on volume and value, interchange fee revenue, certain issuer costs, and fraud losses. The report is the sixth in a series published every two years as prescribed by section 920 of the EFTA and summarizes information collected from debit card issuers subject to the interchange fee standard in Regulation II and payment card networks. 
 
Comments will be accepted for 60 days after publication in the Federal Register. You can find the report and the proposed rule attached here.
 
Federal Reserve Board invites public comment on proposed guidelines to evaluate requests for accounts and payment services at Federal Reserve Banks
 
On May 5, the Federal Reserve Board invited public comment on proposed guidelines to evaluate requests for accounts and payment services at Federal Reserve Banks ("Account Access Guidelines"). 
 
According to the Federal Reserve, there has been a recent uptick in novel charter types being authorized or considered across the country and, as a result, the Reserve Banks are receiving an increasing number of inquiries and requests for access to accounts and services from novel institutions. To help achieve the goal of applying a transparent and consistent process for all access requests, as well as considering the ramifications for the broader financial system, the Board says it is proposing the Account Access Guidelines for the Reserve Banks to evaluate such requests. These guidelines take into account the Board's legal authority and reflect an analysis of its policy goals.
 
Comments will be accepted for 60 days after publication in the Federal Register. The proposed guidelines and a companion memo from the Fed can be found here. 
 
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
FDIC Issues Proposed Rule Regarding False Advertising, Misrepresentations About Insured Status, and Misuse of the FDIC’s Name or Logo

On April 22, the Federal Deposit Insurance Corporation (FDIC) issued a proposed rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo. This statutory authority allows the FDIC to bring formal enforcement actions, such as cease and desist orders or civil money penalties, against individuals or entities for violations.

The proposed rule describes the process by which the FDIC would identify and investigate potential violations, and the procedures it would follow, when formally and informally enforcing the statutory prohibitions. The proposed rule would also create a central point-of-contact where the public could report or make inquiries about potential violations. Additionally, the proposed rule would establish a more transparent process that would promote stability and public confidence in FDIC deposit insurance and the nation’s financial system.
​
The IPA is preparing comments in response. Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register. Additional information can be found here. 
 
INTERNAL REVENUE SERVICE (IRS)/DEPARTMENT OF THE TREASURY (TREASURY)
 
More than 1.1 million additional Economic Impact Payments disbursed under the American Rescue Plan; payments total approximately 164 million
 
The Internal Revenue Service, the U.S. Department of the Treasury, and the Bureau of the Fiscal Service announced on May 5 that they are disbursing more than 1.1 million payments in the eighth batch of Economic Impact Payments from the American Rescue Plan.
 
The announcement brings the total disbursed so far to approximately 164 million payments, with a total value of approximately $386 billion, since these payments began rolling out to Americans in batches as announced on March 12.
 
The eighth batch of payments began processing on Friday, April 30, with an official payment date of May 5, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:

• In total, this batch includes more than 1.1 million payments with a value of more than $2 billion.

 

• More than 585,000 payments, with a value of over $1.2 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return. 

 

• This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 570,000 of these "plus-up" payments, with a value of nearly $1 billion.

 

• Overall, this eighth batch of payments contains about 600,000 direct deposit payments (with a total value of $1.1 billion) with the remainder on paper payments.

 
The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments.
 
Additional information can be found here. 
 
OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC)
 
Secretary Yellen Announces Intention to Appoint Michael J. Hsu as First Deputy Comptroller of the Office of the Comptroller of the Currency
 
On May 7, Treasury Secretary Yellen announced her intention to appoint Michael Hsu as First Deputy Comptroller of the Office of the Comptroller of the Currency (OCC). In addition, Mr. Hsu will also serve as Acting Comptroller of the Currency.
 
Prior to his appointment, Mr. Hsu was associate director of the Federal Reserve’s division of supervision and regulation, where he oversaw the Large Institution Supervision Coordinating Committee program. He has also held positions at the International Monetary Fund, the Treasury Department and the Securities and Exchange Commission.
 
Additional information can be found here. 

North Dakota Retail Associations File Lawsuit Against Fed on Debit Interchange
On April 29, North Dakota Retail Association and North Dakota Petroleum Marketers Association (“Associations”) filed a lawsuit in the United States District Court for the District of North Dakota Western Division against the Federal Reserve Board (“Board”) seeking a declaratory judgment and permanent injunction finding the standard for reasonable and proportional interchange fees in Regulation II and confirmed by the Updated Rule (12 C.F.R. §235.3(b)) invalid and setting it aside. The associations, allege that the Board has failed to properly follow Congress’s instructions to ensure that debit-card processing fees are reasonable and proportional to the costs of debit-card transactions.
The associations’ full complaint can be found here. 

Chime Enters Into Settlement Agreements with California & Illinois Regarding Its Use of the Term "Banking"
 
In March, Chime Financial, Inc. entered into settlement agreements with the California Department of Financial Protection and Innovation (DFPI) and the Illinois Department of Financial and Professional Regulation – Division of Banking regarding the use of the term “banking” and its derivatives by Chime. These settlements come after inquiries that were launched last year by both agencies independently found that Chime’s usage of the words “bank” and “banking” in certain aspects of Chime’s business violated California and Illinois law respectively. 
 
In brief, both settlements require Chime to distance itself from the use of the term “banking” and its derivatives by modifying statements on its website, on its mobile app, and in advertising to clarify that Chime is not a bank and banking services are provided by its bank partner(s). In addition, Chime will cease using the name “chimebank.com” in its business unless and until it becomes licensed or otherwise authorized to engage in the business of banking under the laws of a state or of the United States. 
 
In addition, Chime has agreed to pay a $200,000 civil money penalty to the State of Illinois. 
 
The California settlement agreement can be accessed here and Illinois settlement can be accessed here.

New Federal Laws
 
None.
 
Pending Federal Bills
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 purpose
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: Referred to the Committee on Financial Services, and in addition to the Committee on the Budget on 3/9/21
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: Referred to the Committee on Financial Services, and in addition to the Committee on the Judiciary on 3/18/21
Sponsor: Rep. Ed Perlmutter (D-CO)

​​​​​​​​​​​​​​​​​​​​​​​​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;  Grant Hannah, Director of Government Relations, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP.
Please address comments and suggestions to: gr@ipa.org.

Cash, Crypto and Cocktails – The Innovative Payments Conference Continues to Educate the Industry
 
Even though it is too soon to get the industry together in person, the IPA continues to help payments professionals keep up with trends in the industry at its online Innovative Payments Conference. 
 
The conference kicked off with a discussion of Banking as a Service, which forms the underpinning of many fintechs. IPA member Metabank led a discussion that included Visa, NetSpend, and Modern Treasury. 
 
We discussed data sharing with Consumer Reports and the Financial Data Exchange. The FDIC presented results from its household banking survey. 
 
Wednesday wrapped up with a cocktail class that featured the head mixologist of Old Elk distillery who explained how to make a Manhattan and discussed payments in the service industry during the pandemic. We also presented our Skiba volunteer awards and the Terrence P. Maher Prepaid Influencer Award.
 
Skiba volunteer awards were presented to the following members for their work on the IPA Fintech Glossary.
 

• Lori Breitzke, Vice President – Product Management, Prepaid & EBT, Commercial & Data Products, FIS    
• Don Becker, VP Prepaid Card Partnerships, CommercePayments, Commerce Bank   
• Liz Nutting, Executive Relationship Manager, Prepaid Business Development, Discover Global Network   

 
For her help with member recruitment and her service on the IPA Board and finance committee, a Skiba was awarded to:
 

• Joan Herman, Chief Operating Officer, Paysign

 
The IPA presented the annual Terrence P. Maher Prepaid Influencer Award to IPA Board Member Emeritus Nora Arpin.
 
As we look forward to the coming week, we will delve deeper into some of the topics that could shape the future of payments, including more on fraud, Postal Banking, and cannabis payments. We also will be looking at how the payments industry can help shape the world for the better in sessions on racial equity in financial services and in a session on payments during crisis. 

If you’d like to attend these and get access to the recordings of previous sessions, you can still register. Visit IPC 2021 - Innovative Payments Association (ipa.org)
​

INTERNAL REVENUE SERVICE (IRS)
 
IRS, Treasury disburse 2 million more Economic Impact Payments under the American Rescue Plan; VA beneficiaries bring total to approximately 159 million as payments continue
 
On April 14, the Internal Revenue Service, the U.S. Department of the Treasury and the Bureau of the Fiscal Service announced they are disbursing nearly 2 million payments in the fifth batch of Economic Impact Payments from the American Rescue Plan.
 
This announcement brings the total disbursed so far to approximately 159 million payments, with a total value of more than $376 billion, since these payments began rolling out to Americans in batches as announced on March 12.
 
The fifth batch of payments began processing on Friday, April 9, with an official payment date of April 14, with some people receiving direct payments in their accounts earlier as provisional or pending deposits. Here is additional information on this batch of payments:

• In total, this batch includes nearly 2 million payments with a value of more than $3.4 billion.
• More than 320,000 payments, with a total value of $450 million, went to Veterans Affairs (VA) beneficiaries who receive Compensation and Pension (C&P) benefit payments but who don't normally file a tax return and didn't use the Non-Filers tool last year.
• Nearly 850,000 payments, with a total value of nearly $1.6 billion, went to eligible individuals for whom the IRS previously did not have information to issue an Economic Impact Payment but who recently filed a tax return. 
• This batch also includes additional ongoing supplemental payments for people who earlier this year received payments based on their 2019 tax returns but are eligible for a new or larger payment based on their recently processed 2020 tax returns. This batch included more than 700,000 of these "plus-up" payments, with a total value of more than $1.2 billion.
• Another 72,000 payments went to Social Security beneficiaries who didn't file a 2020 or 2019 tax return and didn't use the Non-Filers tool last year.
• Overall, this fifth batch of payments contains nearly 1.2 million direct deposit payments (with a total value of just under $2 billion) and nearly 800,000 paper check payments (with a total value of over $1.4 billion).
•  Additional information is available on the first four batches of Economic Impact Payments from the American Rescue Plan, which began processing on April 2, March 26, March 19 and March 12.
   
  A larger percentage of payments was made electronically during this round of payments than during previous rounds. This accelerated the delivery of payments to millions of American families whose payments would otherwise have been sent by mail. Over 95% of all Social Security beneficiaries have been paid electronically during this round of payments, compared to 70% in the first round and 72% in the second round.
   
  The IRS will continue to make Economic Impact Payments on a weekly basis. Ongoing payments will be sent to eligible individuals for whom the IRS previously did not have information to issue a payment but who recently filed a tax return, as well to people who qualify for "plus-up" payments.
   
  More information can be found here. 
   
  CONSUMER FINANCIAL PROTECTION BUREAU (CFPB)
   
  Initial Documents Filed in PayPal Case Appeal
   
  As laid out in the scheduling order issued last month by the United States Court of Appeals for the District of Columbia Circuit, initial documents were filed in the appeal in the PayPal case on April 9. These documents are largely procedural and serve as introductory documents in the appeal. 
   
  In addition to the initial documents, the scheduling order requires that dispositive motions be filed by April 26, 2021 for both parties. These filings will likely be the first substantive filings in the appeal.
   
  The scheduling order can be accessed here. The IPA will make all documents filed in the case available to members as soon as they are released to the public. 
   
  FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)
  Agencies Seek Wide Range of Views on Financial Institutions’ Use of Artificial Intelligence
  On March 31, five federal financial regulatory agencies announced they are gathering insight on financial institutions’ use of artificial intelligence (AI). The agencies are seeking information on how financial institutions use AI in their activities, including fraud prevention, personalization of customer services, credit underwriting, and other operations. 
  The Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) announced the request for information (RFI) to gain input from financial institutions, trade associations, consumer groups, and other stakeholders on the growing use of AI by financial institutions. More specifically, the RFI seeks comments to better understand the use of AI, including machine learning, by financial institutions; appropriate governance, risk management, and controls over AI; challenges in developing, adopting, and managing AI; and whether any clarification would be helpful. 
  
  Additional information can be found here. 
  
  

Agencies Issue Statement and Request for Information on Bank Secrecy Act/Anti-Money Laundering Compliance
On April 9, the federal banking agencies, in consultation with the Financial Crimes Enforcement Network and the National Credit Union Administration, issued a joint statement addressing how risk management principles described in the “Supervisory Guidance on Model Risk Management” relate to systems or models used by banks to assist in complying with the requirements of Bank Secrecy Act (BSA) laws and regulations. The statement further notes that it does not alter existing BSA/anti-money laundering (AML) legal or regulatory requirements or establish new supervisory expectations, and that no specific model risk management framework is required.

The agencies, along with the National Credit Union Administration and the Financial Crimes Enforcement Network, also announced a request for information (RFI) on the extent to which the principles discussed in the guidance support compliance by banks and credit unions with BSA/AML and Office of Foreign Assets Control requirements. The agencies are seeking comments and information to better understand bank practices and determine whether additional explanation or clarification may be helpful.

Responses are due by June 11th. Additional information can be found here. 

FDIC Seeks Input on How to Modernize Sign and Advertising Requirements for Banks
On April 9, the Federal Deposit Insurance Corporation (FDIC) announced that it is again seeking the public’s input on potential modernization of its sign and advertising requirements to better reflect how banks and savings associations operate and how consumers use banking services.
On February 19, 2020, the FDIC published a notice in the Federal Register soliciting public input regarding potential changes to its official sign and advertising rules. However, given the challenges associated with the COVID-19 pandemic, the agency temporarily postponed this effort on April 16, 2020. As banks continue to innovate, the FDIC is renewing its effort to revise and clarify its official sign and advertising rules related to FDIC deposit insurance. Read the FDIC’s Request for Information.

Additional information can be found here. The IPA previously submitted comment in response before the RFI was postponed in 2020, which can be accessed here. 

Financial Crimes Enforcement Network (FinCEN)
FinCEN Launches Regulatory Process for New Beneficial Ownership Reporting Requirement
On April 1, the Financial Crimes Enforcement Network (FinCEN) issued an Advance Notice of Proposed Rulemaking (ANPRM) to solicit public comment on a wide range of questions related to the implementation of the beneficial ownership information reporting provisions of the Corporate Transparency Act (CTA). 
​
This ANPRM is the first in a series of regulatory actions that FinCEN will undertake to implement the CTA, which is included within the Anti-Money Laundering Act of 2020 (AML Act).  The AML Act is part of the FY 2021 National Defense Authorization Act, which became law on January 1, 2021.  

The CTA amended the Bank Secrecy Act to require corporations, limited liability companies, and similar entities to report certain information about their beneficial owners (the individual natural persons who ultimately own or control the companies).  This new reporting requirement will enhance the national security of the United States by making it more difficult for malign actors to exploit opaque legal structures to launder money, finance terrorism, proliferate weapons of mass destruction, traffic humans and drugs, and commit serious tax fraud and other crimes that harm the American people.

The CTA requires FinCEN to maintain the reported beneficial ownership information in a confidential, secure, and non-public database.  Furthermore, the CTA authorizes FinCEN to disclose beneficial ownership information subject to appropriate protocols and for specific purposes to several categories of recipients, such as federal law enforcement.  Finally, the CTA requires FinCEN to revise existing financial institution customer due diligence regulations concerning beneficial ownership to take into account the new direct reporting of beneficial ownership information.
Comments are due by May 5, 2021. Additional details can be found here. 

Tester casts doubts on Brown's plan for Fed-run bank accounts
 
At a virtual conference last week Sen. Jon Tester, a Democrat of Montana and member of the Senate Banking Committee, was asked about FedAccounts and said, “I honestly don't think they're going to have a lot of traction.” He went on to say, "What we've seen is a healthy banking sector. We should talk about how to get more un- and under-banked folks access to financial services.... But quite frankly, I think to pull off the post offices or the Federal Reserve banking policies — I don't think it's going to have much life.”
 
Sen. Tester is a moderate Democrat and while, we haven’t heard directly from other Dems on the panel, it is possible that other moderate Dems on Senate Banking could take the same view as him.
 
Additional information on Sen. Tester’s comments can be found here. 
 
Recap of House Financial Services Committee Hearing on Charters
 
On April 15, the House Financial Services Subcommittee on Consumer Protection and Financial Institutions held a hearing entitled, “Banking Innovation or Regulatory Evasion? Exploring Trends in Financial Institution Charter.”
 
The majority of the discussion was focused on Industrial Loan Companies (ILCs) and the separation of banking and commerce. Specifically, the safety and soundness, data privacy, and competition concerns that could arise if commerce and banking are intermingled were discussed a number of times and attracted interest from members on both sides of the aisle. 
 
There also was some discussion of the OCC’s True Lender Rule and cryptocurrency as well. Former Acting Comptroller of the Currency Brian Brooks was a witness and got the most airtime. He got a number of questions about actions he took while in charge at the OCC, like the payments charter, Valid When Made and True Lender Rules, and action to allow banks to offer crypto custody services. Mr. Brooks defended his record and largely repeated the messaging on these issues from when he was in office.
 
Additional information and a recording of the hearing can be found here. 
 
House Financial Services Committee Approves FinTech & AI Tasks Forces for 117th Congress
 
During a markup on April 20, the House Financial Services Committee approved resolutions to re-establish the FinTech and AI Task Forces in the 117th Congress. 
 
According to the resolution, the FinTech Task Force shall, “…conduct hearings and investigations relating to financial technology within the Committee’s Rule X jurisdiction and may issue reports to the Committee detailing its findings and recommendations.” 
 
In addition, the AI Task Force shall, “…conduct hearings and investigations relating to artificial intelligence within the Committee’s Rule X jurisdiction and may issue reports to the Committee detailing its findings and recommendations.” 

Reps. Stephen Lynch (D-MA) and Tom Emmer (R-MN) will serve as chair and ranking member of the FinTech Task Force respectively. In addition, Reps. Bill Foster (D-IL) and Anthony Gonzalez (R-OH) will serve as chair and ranking member of the AI Task Force respectively. 
 
The resolutions can be accessed here. 
 
Kaptur, Gillibrand, Ocasio-Cortez, Pascrell Call on Congress to implement Postal Banking Pilot Programs
 
On April 15, Congresswoman Marcy Kaptur (D-OH), alongside U.S. Senator Kirsten Gillibrand (D-NY), and U. S. Representatives Alexandria Ocasio-Cortez (D-NY) and Bill Pascrell (D-NJ) called on Congress to implement postal banking pilot programs in rural and urban communities across the country as part of the Fiscal Year 2022 (FY22) Senate and House Financial Services and General Government Appropriations (FSGG) Appropriations Bill and eventual final conference agreement. The lawmakers also pushed for $6 million in funding for USPS in FY22 to carry out the pilot programs to expand non-bank financial services offerings.
 
Additional information can be found here. 
 
House Financial Service Committee Republicans Release Report on FinTech Task Force 
 
On April 20, the Republican staff of the House Financial Services Committee released a report entitled, The Cutting Edge of Finance: An Examination of the Work of Republicans on the House Financial Services Committee’s Task Forces on Financial Technology and on Artificial Intelligence. This report summarizes the work of Republicans on the House Financial Services Committee’s two task forces focused on financial innovation: the Task Force on Financial Technology and the Task Force on Artificial Intelligence. The task forces were intended to help the Committee on Financial Services better understand the latest technology developments in financial services.
 
This report summarizes the key topics on which Committee Republicans focused, the themes that emerged over the course of the Congress, and policy recommendations for regulators and Congress. The key takeaways are that Congress must (1) promote greater financial inclusion and expanded access to financial services, and (2) ensure that the federal government does not hamper the U.S.’ role as a global leader in financial services innovation. 
 
The full report can be found here. 

​None.

​New Federal Laws
 
None.
 
Pending Federal Bills
 
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 purpose
 
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: Referred to the Committee on Financial Services, and in addition to the Committee on the Budget on 3/9/21
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: Referred to the Committee on Financial Services, and in addition to the Committee on the Judiciary on 3/18/21
Sponsor: Rep. Ed Perlmutter (D-CO)