Policy Positions

Arbitration Clauses with Class-Action Waivers

Arbitration is a widely used method of dispute resolution for consumer financial products. When compared with other forms of dispute resolution, arbitration offers consumers numerous and significant benefits including a more flexible, more convenient, and comparatively inexpensive means of settling a dispute. In addition, the arbitration process actually gives consumers a broad array of potential remedies that may not be available in other forms of dispute resolution, such as class-action litigation, because arbitrators may generally award any form of individual relief, including injunctions and punitive damages, rather than merely making a determination and award for actual damages.

The IPA believes that federal and state measures that prohibit pre-dispute arbitration agreements along with class-action waivers often fail to consider the impact these kinds of laws and regulations would impose on consumers and industry participants. In light of these concerns, the IPA believes that during any debate on arbitration, policymakers must consider the benefits afforded by the arbitration process to consumers and the likely negative impact restrictions on the arbitration process may therefore take on both consumers and businesses alike. In addition, if a state, despite these concerns, moves forward with a proposal to limit or restrict the arbitration process, including the use of class-action waivers, then policymakers in that state, instead of a one-size-fits-all proposal, should contemplate solutions that take an industries' track record of responding to and resolving customer complaints in a timely and effective manner into consideration.

Full Policy Statement on Arbitration Clauses with Class-Action Waviers
File Size:	87 kb
File Type:	pdf

Download File

Fair Treatment of Payroll Card Accounts Under State Unclaimed Property Laws

Over 5.9 million Americans use payroll card accounts to receive their wage payments. Payroll Card Accounts are non-traditional deposit accounts, held at a financial institution, that allow employees without traditional bank accounts and those with limited access to traditional financial services to enjoy the convenience and security that their coworkers experience with direct deposit. Without Payroll Card Accounts, many underserved workers are forced to operate outside of the financial mainstream and are unable to enjoy the benefits of electronic wage payment. Thus, because Payroll Card Accounts are distinct from wages or checks, they should not be treated in the same manner as wages or checks under unclaimed property regulations.

Full Statement on Fair Treatment of Payroll Card Accounts Under State Unclaimed Property Laws
File Size:	81 kb
File Type:	pdf

Download File

Proposed Framework for Federal Privacy Legislation

The IPA Privacy’s Framework supports principles-based approach to privacy legislation that, among things is technology neutral in order to foster innovation and competition and seeks to reduce regulatory burdens by harmonizing federal and state laws and regulations, including by expressly preempting non-conforming state law. With respect to data breaches and other consumer issues, we believe such issues are best handled through Federal regulators and state Attorneys' General without an individual private right of action, as a private right of action would result in unnecessary and costly litigation.

Our members believe that the current state of consumer privacy requirements undermines consumer expectations and trust because it is a patchwork of nonconforming state laws. For this reason, Federal action is needed to develop a uniform framework for the collection, use, and sharing of personal data as well as addressing data breaches. Such Federal action should balance the interests of consumer privacy with not overly burdening industry providers. In support of this goal, our members have adopted the IPA's Proposed Framework for Federal Privacy Legislation that we believe appropriately balances these equities.

Full Statement on Proposed Framework for Federal Privacy Legislation
File Size:	166 kb
File Type:	pdf

Download File

Summary of Remaining Issues with the CFPB's Prepaid Account Rule

The CFPB's Final Rule for Prepaid Accounts under the Electronic Fund Transfer Act (Regulation E) and the Truth in Lending Act (Regulation Z), extends Regulation E coverage to several prepaid account products. As a result, prepaid account products must comply with a number of regulatory obligations including the provision of account opening disclosures, offering limited liability and error resolution protection, and providing periodic statements or transaction histories to accountholders. The IPA worked with the CFPB throughout its rulemaking process to implement a number of positive changes to the Prepaid Rule. While our members appreciate the changes the CFPB made to the Prepaid Rule in response to our concerns, the IPA supports making additional changes to the Prepaid Rule to help streamline it and ease the myriad compliance challenges it presents while still retaining critically important consumer protections. In particular, the IPA and its members support changes to the Prepaid Rule’s disclosure requirements, restrictions for credit offered in connection with a prepaid account, and definition of “business partner”.

Full Statement on Summary of Remaining Issues with the CFPB's Prepaid Account Rule
File Size:	122 kb
File Type:	pdf

Download File