Welcome to the Top 3 Innovating Payments news headlines for the week of January 20, 2025. In this issue, the Consumer Financial Protection Bureau (CFPB) has approved an application from Financial Data Exchange to issue standards for Open Banking. Additionally, the CFPB has ordered the operator of Cash App to pay $175 million and address its failures on fraud. Lastly, the U.S. Faster Payments Council has released a comprehensive report providing financial institutions with valuable insights and actionable steps for enabling instant payment-sending capabilities on the FedNow® Service and RTP® Network.
1. CFPB Approves Application from Financial Data Exchange to Issue Standards for Open Banking (CFPB)
Today, the Consumer Financial Protection Bureau (CFPB) issued an order recognizing Financial Data Exchange, Inc. (FDX) as a standard setting body under the CFPB's Personal Financial Data Rights rule…The Personal Financial Data Rights rule, released in October 2024, requires financial institutions, credit card issuers, and other financial providers to unlock an individual's personal financial data and transfer it to another provider at the consumer's request for free. The CFPB established a formal application process outlining the qualifications to become a recognized industry standard setting body, which can issue standards that companies can use to help them comply with the CFPB's rule. (Read more.)
2. CFPB Orders Operator of Cash App to Pay $175 Million and Fix Its Failures on Fraud (CFPB)
Today, the Consumer Financial Protection Bureau (CFPB) ordered Block, the operator of the peer-to-peer payments app Cash App, to refund and pay other redress to consumers up to $120 million and pay a penalty of $55 million into the CFPB's victims relief fund. Block employed weak security protocols for Cash App and put its users at risk. While Block is required by law to investigate and resolve disputes about unauthorized transactions, the company's investigations were woefully incomplete. (Read more.)
3. U.S. Faster Payments Council Unveils Comprehensive Guideline for Instant Payment Sending Capabilities (U.S. Faster Payments Council)
The U.S. Faster Payments Council (FPC), a membership organization devoted to advancing safe, easy-to-use faster payments in the United States, today released the latest guideline from the FPC Operational Considerations Work Group, sponsored by Endava: Operational Considerations for Instant Payments Send-Side Primer. This comprehensive report provides financial institutions (FIs) with valuable insights and actionable steps for enabling instant payment sending capabilities on the FedNow® Service and RTP® Network. (Read more.)
What potential impact might the CFPB's approval of Financial Data Exchange's application to issue standards for open banking have on the industry? What are the downstream implications of the CFPB's suit against Cash App for what they refer to as weak security protocols that put their users at risk? Finally, how might your financial institution use the new U.S. Faster Payments Council's guidelines to enable instant payment-sending capabilities?
Check back soon for our next issue, highlighting the industry's most pressing and important 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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