In this episode of Payments Pros, Keith Barnett and Carlin McCrory are joined by Jordan Wright, CEO of Atomic Financial, to discuss the Consumer Financial Protection Bureau’s (CFPB) proposed 1033 rule. This rule aims to limit the misuse or sale of consumer data, and is expected to be finalized by summer 2024.
On January 9, SB 1146, entitled the Earned Wage Access Services Act, was introduced into the Florida Senate. The bill would require earned wage access (EWA) providers to register with the Florida Financial Services Commission. The bill also requires EWA providers to develop procedures for dealing with consumer questions and complaints, requires consumer notifications, and requires providers to offer at least one reasonable option for consumers to get EWA proceeds at no cost. Like Nevada, discussed here, the law specifies that EWA products are not loans (including not being subject to the Consumer Finance Act), nor is such activity considered money transmission under Florida law. SB 1146 has been referred to the banking and insurance committee for consideration. If passed, the law would take effect on October 1, 2024.
On January 9, the California Department of Financial Protection and Innovation (CA DFPI) announced a consent order with Credova Financial, LLC, (Credova) to resolve allegations that, in violation of the California Consumer Financial Protection Law, the company failed to disclose potential third-party fees to consumers. Pursuant to the settlement, Credova is required to pay a $50,000 penalty and disclose potential third-party convenience fees to consumers in the future.
In this episode of Payments Pros, Keith Barnett and Carlin McCrory discuss the Consumer Financial Protection Bureau’s (CFPB) fall supervisory highlights, focusing on “junk fees.” The report covers examinations in areas of deposits, auto servicing, and remittances completed between February and August 2023. The recent report reveals that their efforts have resulted in institutions refunding more than $140 million to consumers. The report primarily focuses on deposits as an area of supervisory observations.
On December 22, Montana Attorney General Austin Knudsen issued an opinion on whether Earned Wage Access (EWA) products constitute either “consumer loans” under Montana Code § 32-5-102(2)(a) or “deferred deposit loans” under § 31-1-703. In short, AG Knudsen’s opinion was no, “so long as the EWA product is fully non-recourse, does not condition an income-based advance on any interest, fees, or other consideration or expenses, and limits income-based advances to income already earned by the consumer.”
On December 19th, the Consumer Financial Protection Bureau (CFPB or Bureau) issued a report highlighting consumers’ experiences with overdraft and nonsufficient funds (NSF) fees. The report found that roughly a quarter of consumers are still being charged these fees despite the CFPB’s hostility towards so called “junk fees,” which has led many banks and credit unions to eliminate such fees. The report further found that many consumers who were charged overdraft and NSF fees had access to an alternative asserted to be cheaper by the CFPB, such as available credit on a credit card.
In this special joint episode of Payments Pros and The Consumer Finance Podcast, Carlin McCrory, Keith Barnett, James Kim, and Chris Willis discuss the Consumer Financial Protection Bureau’s (CFPB) proposed larger participant rule for consumer payments providers.
In March 2023, the California Department of Financial Protection and Innovation (DFPI) proposed new regulations under the California Financing Law that would update the definition of loan to include what it dubs as “income-based advances” also known as earned wage access (EWA) products, except for those offered by employers. After considering written comments to the proposed regulations, on November 6, the DFPI issued modifications to the proposed regulations and announced comments on the modifications would be accepted until November 27. Under the modifications, direct-to-consumer (i.e., non-employer offered) EWA products would still be defined as loans.
On November 20, 2023, the California Department of Financial Protection and Innovation (DFPI) issued an invitation for comments on proposed application-related rulemaking under the Digital Financial Assets Law (DFAL). This move comes after Governor Gavin Newsom signed Assembly Bill 39 and Senate Bill 401, which together create the DFAL. The DFAL and Senate Bill 401, signed into law by Governor Gavin Newsom on October 13, 2023, are set to regulate virtual currency activities within California, effective July 1, 2025.
In this episode of Payments Pros, Keith Barnett and Carlin McCrory are joined by Pidgin’s Senior Vice President of Innovation Kevin Olsen to discuss faster payments and the FedNow service.