Welcome to Innovating Payments Top 3 News Headlines for the Week of June 2, 2024. In this issue, a legal case involving how Citi responded to customers who had money stolen via wire transfers has caused a spat between the CFPB and industry associations over the scope of the Electronic Funds Transfer Act. The CFPB also issued a final rule requiring certain types of nonbank-covered persons subject to certain agency and court orders. Finally, Pidgin, a secure, real-time payments platform, has partnered with Corelation Inc. to enable more credit unions to offer real-time payments to their members.
Read on to learn more.
1. Citi Suit Prompts Dispute Between CFPB and Industry Groups (Finextra)
A legal case involving how Citi responded to customers who had money stolen via wire transfers has caused a spat between the CFPB and industry associations over the scope of the Electronic Fund Transfer Act (EFTA). Citi is being sued by the state of New York for failing to respond adequately when people promptly told the bank that scammers had stolen money by initiating wire transfers from their accounts online. (Read more.)
2. Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders (CFPB)
Under the Consumer Financial Protection Act of 2010, the Consumer Financial Protection Bureau is issuing this final rule to require certain types of nonbank covered persons subject to certain final public orders obtained or issued by a government agency in connection with the offering or provision of a consumer financial product or service to report the existence of the orders and related information to a Bureau registry. The Bureau is also requiring certain supervised nonbanks to file annual reports regarding compliance with registered orders. (Read more.)
3. Pidgin Partners with Corelation to Enable Real-Time Payments for Credit Unions Nationwide (FinTech Global)
Pidgin, a secure real-time payments platform, has partnered with Corelation Inc. to enable more credit unions to offer real-time payments to their members through Pidgin's payments ecosystem. The partnership is designed to support credit unions in implementing real-time payments. According to Cornerstone's "What's Going On In Banking" report, more than one-third of credit unions plan to implement real-time payments by the end of this year, with another 34% planning to implement by 2025 or later. (Read more.)
According to the above article, New York Attorney General Letitia James has alleged that because Citi makes wire transfers available to consumers online and through mobile banking apps, it must reimburse victims of fraud under the EFTA, similar to when banks reimburse victims of electronic credit or debit card fraud. What are the implications of this suit for financial institutions? What are your thoughts on the CFPB's final rule requiring certain nonbank-covered persons to be subject to certain agency and court orders? How does the increase in instant payments platforms affect your financial institution's implementation plans?
Check back soon for our next issue, highlighting the industry's most pressing and need-to-know developments. Until then, visit us online at Innovating Payments.
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AUTHOR: Joe Casali, AAP, NCP
Executive Vice President
As the EVP of Payments Innovation for NEACH, Joe focuses on exploring innovative solutions and technologies that will help position members for success, both now and in the future. Connect with Joe to read more of his blogs, articles, and posts.
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