MoneyGram Settles Claims that it Transferred Money to Fraudsters
MoneyGram agrees to pay $13 million to settle claims that criminals used its network for fraudulent transactions. The company also will increase its anti-fraud activities.
Regulation
A Year In, Progress for Fed’s Payments Improvement Plan
A year after the Federal Reserve announced a plan to enhance the speed, safety and efficiency of payments in the U.S., the program has made substantial progress, the Fed reports.
IRS Thwarts Hack; Obama Calls for More Cybersecurity
Oh the irony. On the same day President Barack Obama and his administration presented plans to strengthen the country’s cybersecurity, the IRS announced an attack on its Website.
U.K. Gov’t Group Calls for Open Banking Standard
A U.K. government panel is calling for the development of an open banking standard that will enable banking data to be shared and used securely, giving consumers access to tailored financial solutions and an easier way to compare products and services.
Russian Lawmakers Want to Ban Bitcoin
Bitcoin continues to encounter hurdles as its supporters try to facilitate the digital currency’s mainstream acceptance. Though certain states and countries are welcoming bitcoin, or permitting it with certain provisos, Russia is considering a ban.
Clearing contradictions in derivatives regulation
There’s one challenge that regulators seem unable to address, and that is regulation itself. Today’s evolving regulatory environment seems to be beset by a range of internal contradictions. One such contradiction is the banks’ decision to act as clearing providers for derivatives businesses.
CFPB Takes Aim at Lack of Checking Account Options for Consumers
The CFPB announced today a three-prong approach to ensure consumers are receiving a fair shake regarding checking account access. But what may surprise many in the prepaid industry is that the agency also is providing information to consumers about the prepaid option.
EU Commission, U.S. Reach New Privacy-Shield Agreement (Feb. 2, 2016)
Shortly after the original deadline to reach an agreement expired on Sunday, the EU Commission and the U.S. have agreed to a new Safe Harbor deal. The new framework will protect the fundamental rights of Europeans when their data are transferred to the U.S. and ensure legal certainty for businesses, according to an EU Commission announcement.
EU Eyes New Virtual Currency, Prepaid Regs, Transaction Monitoring (Feb. 2, 2016)
European Union leaders are calling for tighter regulation of prepaid cards and virtual currencies to restrict terrorist financing and anonymous payments. The European Commission—the executive arm of the EU—also said it will consider launching an intra-EU version of a transaction monitoring agreement that has since 2010 helped detect the movement of funds by terrorists between the U.S. and EU.
CFPB: Prepaid Complaints Down in December (Feb. 1, 2016)
Prepaid cards continued to comprise just a tiny percentage of the consumer complaints received by the CFPB, according to the agency’s latest monthly complaint “snapshot” report. During the month of December 2015, the CFPB received a total of 230 prepaid-related complaints (out of 20,388 total complaints), down 11 percent from the 257 complaints it received in November.
U.S. House Republicans Accuse CFPB of Bungling Auto Loan Settlement Payments (Jan. 27, 2016)
U.S. House Republicans have accused the CFPB of bungling payouts meant to settle claims of racial discrimination in auto lending.
Crime Doesn’t Pay: Two Credit Card-Related Fraud Cases Result in Jail Time (Jan. 26, 2016)
Two separate cases involving credit card fraud have led to a sentence of 80 months in prison for leading one of the largest credit card fraud schemes and a guilty plea to a charge of stealing credit card data.
FTC: Big Data Practices Could Violate Federal Laws (Jan. 25, 2016)
Big data has proven to be a useful tool for retailers and financial services providers seeking to identify customer habits and preferences—but federal regulators are warning that certain uses of consumer information may potentially violate consumer protection laws.
Money market statistical reporting: challenges for 2016 and beyond
Money Market Statistical Reporting presents a fair number of challenges. And firms are pressed for time to prepare for these requirements, according to an overview prepared by Wolters Kluwer Financial Services. Where they may have adopted tactical solutions in the past to meet transaction level reporting obligations, now is a good opportunity to think more strategically about investing in the right platform and infrastructure. This is especially true given that daily reporting obligations will soon be extended in 2018 to include securities and financial transactions
Washington State Proposes Problematic Payroll Card Rules (Jan. 21, 2016)
Add another state in play regarding proposed restrictions on payroll cards. Washington state representatives introduced a bill making it unlawful for payroll card providers to charge certain fees.
Viewpoint: Balancing Digital Money, Counter-Terrorism and the Future of E-Money in Europe
Following the Nov. 13 attacks in Paris, some European member states are calling for swift action, while others are concerned that too much regulation would stifle prepaid card distribution and innovation.
Why is it so hard to know who you’re doing business with?
Every bank wants to achieve a single view of a customer, but no-one has found an easy, cost-effective, scalable way to do it. The simple fact is that there is too much customer information, entering the bank from too many places, to align and maintain into a single view. An effective solution would reduce costs, allow the bank to generate revenue faster, facilitate KYC processes and meet regulatory requirements.
Viewpoint: Terrorist Financing and Prepaid Cards: Ban Them!
When a terrorist spends cash, there is no trace, no history of where it came from, where or how it was spent. But using a prepaid card leaves a trail to follow.
U.S. Court Lets First Amendment Challenge to Surcharge Prohibitions Stand (Jan. 19, 2016)
A U.S. appeals court has declined a request from Florida for a full review over a ruling that allows merchant to offer discounts for cash transactions, a move that could lead to more Floridians choosing to pay with cash.
CFPB Complaint Report: Prepaid, Money Transfers Less than 2% and 1% of Consumer Complaints (Jan. 12, 2016)
The CFPB recently released its November complaint report or “snapshot” of consumer complaints it received through its Website for the three month average between September 2014 and November 2015. Although prepaid saw a jump of 215 in complaint volume, prepaid complaints still represented only 2 percent of all complaints the CFPB received during the period.
FinCEN Seeks Comment on Cost Analysis of CDD Proposal (Jan. 12, 2016)
A proposed rule that would place new Customer Due Diligence requirements on financial institutions—including prepaid issuers—has taken a step forward with the release of two new documents estimating the impact and cost the proposed rule would have on regulated institutions and seeking comment from stakeholders by Jan. 25.
People’s Bank of China Revokes Prepaid Provider’s License (Jan. 7, 2016)
The People’s Bank of China (PBC), the country’s central bank, this week has revoked the license of Shanghai Chang Gou Enterprise Services, a prepaid card-issuing company, preventing it from selling prepaid cards, according to Reuters.
Two Lenders Settle Charges in $353 Million FTC Case (Jan. 6, 2016)
Two payday lenders have settled Federal Trade Commission charges over allegedly hitting customers undisclosed and inflated fees.
Idaho Ag Dept. First to Launch NIC’s eGovExpress Digital Wallet (Dec. 23, 2015)
Idaho’s Department of Agriculture is the first government department to launch the eGovExpress digital wallet developed by Olathe, Kan.-based NIC Inc., provider of official government Web portals and digital government services for more than 3,500 federal, state and local government agencies.
Viewpoint: Prepaid Regulations Should Go on a New Year’s Diet
The CFPB needs to return to its original plans on prepaid regulations and put its proposed rules on a New Year’s diet. By issuing rules focusing solely on disclosure, the CFPB could issue guidance earlier in 2016 that would help consumers, prevent access disruptions, and potentially reduce the size of the landfill needed to for the mountains of noncompliant cards and marketing materials.
Cyber-security and operational risk converge, says study
Operational risk and cyber-security concerns are converging as a topic for risk managers, who also face a changing agenda resulting from the digital transformation of baking and financial services.
CFPB Releases Student Scorecard, Calls Colleges on the Carpet (Dec. 17, 2015)
The CFPB yesterday released its “Safe Student Account Toolkit,” which includes a scorecard to help colleges pick the best school-sponsored deposit or prepaid accounts for their students.
Senator Menendez Strikes at Prepaid Again
It’s almost become a holiday tradition for Senator Robert Menendez (D-N.J.) to propose prepaid legislation in December. His previous three attempts went nowhere, but this time he proposed his bill in November. Still, more pressing issues, such as spending and cybersecurity, may keep his measure on the back burner for now.
EU Fee Caps Effective Today (Dec. 9, 2015)
The European Union’s cap on fees banks can charge retailers for processing credit and debit card payments went into effect today, but there are some questions whether the measure will have the desired effect.
FTC Bans Telemarketers from Accepting Cash Reload Mechanisms (Dec. 8, 2015)
The FTC has banned telemarketers from accepting four types of payments—among them are cash reload mechanisms. The ban is supposed to help shield consumers from fraudulent telemarketers.
CFPB Staffing, Fines up in Fiscal 2015 (Dec. 8, 2015)
The number of CFPB employees grew to 1,529 in 2015, from 1,443 the previous fiscal year, according to the agency’s financial report for the 2015 fiscal year, ended Sept. 30. The CFPB collected civil penalties totaling $183.1 million from 37 cases in 2015—a substantial increase from the $77.5 million collected in 2014.
CFPB Denies UniRush Petition for More Time to Produce Documents (Dec. 7, 2015)
The CFPB has denied UniRush’s petition to narrow the scope and extend the time the company has to produce documents for a bureau investigation following an October system outage that left some RushCard cardholders without access to their account information and, in some cases, their funds.
Time to think strategically about Basel capital calculations
As part of the ongoing Basel reforms, the Bank for International Settlements is busy rewriting the rules that govern how much capital banks must maintain in order to mitigate different types of risk. So far the Standardized Approach for Measuring Counterparty Credit Risk Exposures and the Fundamental Review of the Trading Book have garnered the most attention. However, these are just two components of a much larger package of changes to the Basel capital requirements, which banks need to think about holistically and start factoring into their technology programs now
Webinar: Coping with Consumer Complaints and CFPB Expectations (Dec. 2, 2015)
Deciphering how the CFPB handles consumer complaints—and ultimately decides to take action against a company—can be difficult. During a recent Webinar, Tristram Wolf, a Ballard Spahr associate and former CFPB attorney policy writer and investigator, joined colleagues in offering an inside look at the complaint process and tips for staying out of the CFPB’s crosshairs.
Target Reaches $39.4 Million Breach Settlement with Banks, MasterCard (Dec. 2, 2015)
Target is moving another step forward in its attempts to put its 2013 data breach behind it.
House Committee Applauds Mobile Payments Innovation (Dec. 2, 2015)
In a Congressional hearing yesterday, lawmakers examined the role mobile payments technologies are playing in disrupting traditional payments, paying particular attention to how mobile has increased payments security and enabled small businesses and underbanked consumers to access electronic payments.
PSR sets out guidance on card payment regulation
The UK’s Payment Systems Regulator has published draft guidance on its plans for regulating new European payment card legislations that comes into force next week.
Trade repositories fall short warns CPMI-IOSCO study
Just under two-thirds of the world’s top nations in capital markets have now adopted international best practices, according to a new report on financial market infrastructures, but more work is needed on trade repositories.
ERPB Approves Instant Payments Plan (Nov. 29, 2015)
Instant payments are a step closer to becoming a reality in Europe, now that the European Payments Council (EPC) has submitted and received approval on its proposal for the design of a pan-European instant credit transfer framework.
Losing the risk management war
It’s no secret that past risk management practices and regulatory frameworks failed with respect to the global financial crisis. There were a number of reasons behind this, ranging from an overreliance on quantitative analysis to poor risk governance and frameworks, not to mention a lack of understanding around concentrated risk build-up such as leverage, convexity […]
