On November 20, Consumer Financial Protection Bureau Director Richard Cordray urged financial institutions to develop faster systems for processing electronic funds transfers (EFTs). In his prepared remarks, however, he insisted that these faster systems must offer robust consumer protections.
According to Cordray, the U. S. banking system needs improvement in the ability to process payments and EFTs faster than the existing infrastructure. Cordray noted that The Clearing House and the Federal Reserve Banks are currently working toward this goal, but he admonished these institutions to ensure that the interests of consumers remain a top priority.
From the CFPB’s perspective, faster payment systems are necessary to bring consumers faster access to their deposits. The CFPB insisted, however, that these payment systems must include real-time protection for consumers from being assessed fees when an authorization is declined – similar to the PIN debit system. According to the CFPB, these systems must also include robust consumer protections against unauthorized transactions and erroneous debits. A consumer must be permitted time to review his or her account and dispute fraudulent transfers.
Although Cordray’s remarks included constructive suggestions for strengthening the system for EFTs in the United States, he noted that the CFPB would identify and clean up abuses as it sees them. This remark signals another potential area of focus for future CFPB regulations.