is issued by the Innovative Payments Association twenty times a year as a service to members.
Editors: Brian Tate, President and CEO, IPA; Ben Jackson, COO, IPA; Eli Rosenberg, Partner, Baird Holm LLP; and Gray Derrick, Partner, Baird Holm LLP. Please address comments and suggestions to: email@example.com.
The IPA Holds Compliance Boot Camp and FBI Chicago Field Office Meeting
IPA members recently gathered in Chicago for two days of timely and impactful events, hosted by Discover Financial Services. During the Compliance Bootcamp, attendees heard from compliance experts and received updates on Reg E, EWA, artificial intelligence, BNPL, crypto and stablecoins, and third-party risk oversight. The following day was filled with briefings from our partners at the FBI Chicago Field Office on such topics as cyber threats, human trafficking, money laundering, and financial crimes. Attendees also had the opportunity to network with industry peers. We appreciate Discover Financial Services for hosting us for another successful event!
IPA Mentions in the Media
In addition to our work advocating on behalf of members before state and federal policymakers, the Innovative Payments Association has been active supporting the payments community in the media. Below is a list of media mentions of the IPA, editorials, and IPA podcasts published this year. Feel free to share these internally or on social media.
IPA in the News
All podcasts can be accessed at ipa.org/podcast
California Passes Plastic Gift Card Ban
The California Assembly passed SB728 by a vote of 53-18-9, followed by a vote in the California Senate of 30-9-1. The bill now heads to the governor’s desk for his signature. The bill will ban the sale or distribution of plastic gift cards in the state beginning on January 1, 2027, but will allow retailers to continue to sell or distribute existing stock of plastic cards until January 1, 2028. A new provision added to the bill will exempt plastic cards used to pay public transit fares.
The IPA was active in the California Assembly and Senate and advocated for the extension of the implementation date and the inclusion of the “sell-through” period.
Connecticut Issues EWA Guidance
The Connecticut Department of Banking issued guidance on Earned Wage Access which makes the determination that EWA transactions are credit or “small loans” which may require state licensure if the APR is over 12 percent. In addition, they take an expansive view of the definition of “APR” to include fees or tips. The most relevant part of the guidance reads:
"Accordingly, transactions where monies are advanced to consumers for future wages or salary that have been earned but not yet paid, are within the statutory definition of “small loan” when the amount is $50,000 or less and the APR exceeds 12% when taking into account any amounts paid deemed to be finance charges pursuant to P.A. 23-126. The Department understands that there are a variety of business models related to “earned wage access” products and invites providers to contact the Department with any fact specific questions."
We are still reviewing the guidance, but our initial reading seems to indicate the Department is targeting tips. The full guidance can be found here.
CFPB Ombudsman's Office Releases Mid-Year Update
The CFPB’s Ombudsman’s Office released their 2023 Mid-Year Update. In this update, they highlight their efforts to standardize and streamline the consumer complaint process timeline and share an update on their post-examination survey of supervised entities. The update also describes opportunities to meet with the Ombudsman’s Office in person or virtually.
American Banker Article on EWA
American Banker published an article entitled “Five innovations in earned wage access.” The article features statements from IPA President Brian Tate, and highlights recent product developments from IPA members DailyPay, ZayZoon, and Instant, in addition to other innovations in the EWA industry.
CFPB Issues Report Highlights Role of Big Tech Firms in Mobile Payments
The CFPB published an issue spotlight highlighting the increasing role of Big Tech companies’ policies governing tap-to-pay on mobile devices. The spotlight notes the rapid growth of tap-to-pay usage, and found that Apple forbids banks and payment apps from accessing the tap-to-pay functionality on their mobile devices, while Google does not. According to the issue spotlight, regulations imposed by mobile operating systems can have an impact on innovation, consumer choice, and the growth of open and decentralized banking in the U.S.
IPA Op-Ed on Brokered Deposits
The American Banker published an op-ed by IPA President Brian Tate entitled “There is no need for the FDIC to tinker with its brokered deposits rule.” In the op-ed, Brian reviews the history of the FDIC’s brokered deposits rule and recent statements from the FDIC indicating brokered deposits may have played a role in recent bank collapses. Brian encourages the FDIC, and all bank regulators, to base regulatory solutions on facts and data, rather than the fear of new technology such as fintech debit deposits. Lastly, if the FDIC were to make changes to their brokered deposits rules it could potentially harm the consumers they are trying to protect by increasing costs, stifle innovation, and limit consumer access. As a reminder, the IPA was very active during discussions and negotiations on the FDIC’s Brokered Deposits rule.
FMI/NACS Letter to Federal Reserve on Interchange
We were recently made aware of a December 2022 letter by the Food Industry Association and National Association of Convenience Stores to the Federal Reserve Board petitioning the Fed to open a rulemaking under Section 920 of the Electronic Funds Transfer Act to review the debit interchange rate. Although the letter is from last year, we were only made aware of it, and it was posted online, after the Bank Policy Institute filed a FOIA request.
Additional meetings and letters that the Federal Reserve Board have received on interchange can be found here.
New Federal Bills
H.R. 1163, The Protecting Taxpayers and Victims of Unemployment Fraud Act
This bill, sponsored by Rep. Jason Smith (R-MO-08), would provide financial incentives for states to recover fraudulently paid Federal and State unemployment compensation. The bill was marked up and reported favorably from the House Ways and Means Committee on 2/28/23 by a vote of 20-17. The bill was placed on the floor calendar for consideration on 4/6/23 and passed the House on 5/11/23 by a vote of 230-200.
H.R. 1165, Data Privacy Act of 2023
This bill, sponsored by Rep. Patrick McHenry (R-NC-10) would create a federal data privacy standard, and would preempt preexisting state frameworks. This bill was marked up and reported favorably by the House Financial Services Committee on 2/28/23 by a vote of 26-21.
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