Posted September 14, 2016
NACHA Submits Comments to CFPB on Payday Lending Proposed Rulemaking
NACHA filed comments this week with the Consumer Financial Protection Bureau (CFPB) on their payday lending proposed regulations. The filing was made weeks before the Oct. 7 deadline to allow members to review the letter and incorporate pertinent sections for members planning to file comment letters. In the letter, NACHA stressed that the rule substantively address abuses in a way that does not constrain the ability of financial institutions to provide needed credit products to all consumer segments, and the payment-related aspects of the rule are neutral across tender types, helping to ensure a more level playing field between the ACH system, which is subject to NACHA’s active oversight, and other payment systems that have not been proactive in addressing problematic transactions.
New York Issues Payroll Card Regulations after Following NACHA Suggestions to the Final Regulation by Removing Potential ACH Implications
On Sept. 8, 2016, New York State announced payroll card protections for low-wage workers. Key provisions include the regulation will require payroll card companies to provide access to at least one fee-less ATM near where employees live or work, prevent card issuers from receiving kickbacks or financial remuneration for delivering wages via payroll card, and eliminate a host of fees, including those for account maintenance, overdraft and inactivity.
The new regulations govern all methods of wage payment: cash, paycheck, direct deposit or pay card. NACHA applauds the State for following our comments to them in July and eliminating the provision to have employees opt back into Direct Deposit (see comment 3) as we strongly suggested in our letter. NACHA does not anticipate this regulation will negatively impact Direct Deposit via ACH as the provisions do not generally apply to Direct Deposit via ACH since the State of New York made our suggested revisions.
FinCEN Issues Advisory to FIs Re: E-Mail Compromise Fraud Schemes
On Sept. 6, 2016, The Financial Crimes Enforcement Network (FinCEN) issued an advisory to help financial institutions guard against a growing number of e-mail fraud schemes, in which criminals misappropriate funds by deceiving financial institutions and their customers into conducting wire transfers. This advisory also provides red flags—developed in consultation with the Federal Bureau of Investigation (FBI) and the U.S. Secret Service (USSS)—that financial institutions may use to identify and prevent such e-mail fraud schemes.