Payments Pros – The Payments Law Podcast

In this special joint episode of Payments Pros and The Consumer Finance Podcast, Chris Willis and Carlin McCrory introduce Trevor Salter, a seasoned financial services transactional attorney who recently joined Troutman Pepper. Trevor shares his unique career journey from aspiring environmental attorney to becoming a key player in consumer financial services. The discussion delves into Trevor's experience in strategic partnerships, card partnerships, and consumer data integrations, highlighting the synergies with the firm's comprehensive financial services practice. Tune in to learn more about Trevor's background, his decision to join the firm, and the exciting future ahead for the firm's financial services team.

In this episode of Payments Pros, host Keith Barnett reviews state legislative actions in 2024 related to payments, focusing on the Money Transmission Modernization Act (MTMA), earned wage access (EWA), and peer-to-peer payments.

Keith discusses the MTMA, a model law aimed at standardizing state money transmitter laws. Seventeen states considered the MTMA in 2024, with eight states passing it in some form. Key provisions include removing the "in the business of" language, incorporating the agent of the payee exemption, and inconsistencies on whether to include payroll processors within the definition of money transmission. The MTMA also imposes bonding requirements, though these vary by state.

Keith then transitions to EWA, noting that while four states proposed EWA-related laws in 2024, none were passed. Ohio remains a state to watch.

Finally, the episode addresses a proposed New Jersey law criminalizing the failure to return erroneous electronic payments, raising concerns about its broad applicability and impact on payment processors.

In this special crossover episode of Payments Pros and The Consumer Finance Podcast, Carlin McCrory, Keith Barnett, and Chris Willis are joined by Jason Cover and Mark Furletti to discuss the Consumer Financial Protection Bureau's (CFPB) proposed interpretive rule on earned wage access (EWA) products. EWA allows employees to access wages they have earned before payday, with two main models: employer-integrated and direct-to-consumer. The conversation explores the differences between EWA and payday lending, emphasizing that EWA typically does not involve finance charges or obligations to repay.

The podcast explains the CFPB's proposed interpretive rule, which replaces the 2020 guidance that was more favorable to the industry. The new rule would classify EWA products as credit under the Truth in Lending Act (TILA), requiring additional disclosures. The discussion also covers the CFPB's stance on expedited funding fees and tips, which they argue should be considered finance charges.

The group discusses the CFPB's approach, noting potential challenges and the lack of justification for the proposed rule. They encourage market participants to submit comments before the August 30 deadline to address flaws in the CFPB's analysis.

In this special crossover episode of the Payments Pros Podcast and The Consumer Finance Podcast, Josh McBeain and Chris Willis are joined by colleagues Mark Furletti and Jason Cover to delve into the CFPB's Payday Loan Rule, which is set to become effective again following a Supreme Court decision. The discussion unpacks the broad scope of the rule, extending beyond traditional payday loans to include various financial products. The episode highlights the complexities of compliance, the nuances of the rule's definitions, and the critical steps lenders must take before the March 30, 2025, compliance deadline. Don't miss this insightful conversation on navigating the revived regulatory landscape.

In this episode of Payments Pros, Keith Barnett is joined by Eli Polanco, founder and CEO of Nivelo, to discuss critical issues in payroll processing. They highlight the significant impact that the Money Transmitter Modernization Act (MTMA) will have on payroll processors in the states that have adopted the portion of the MTMA requiring payroll processors to obtain money transmitter licenses.

Eli explains the complexities introduced by the MTMA, including the need for payroll providers to navigate through state regulations. This has led to increased operational costs and uncertainty within the industry.

The discussion also covers the critical role of payroll providers and their bank partners in managing the movement of employee payroll across the country, which includes tax payments and garnishments. Eli emphasizes the importance of robust risk management practices and compliance with Nacha rules. Looking ahead, Eli predicts increased consolidation in the payroll industry and higher costs for payroll services due to regulatory pressures, which potentially stifles competition and innovation.

In this special crossover episode of The Consumer Finance Podcast and Payments Pros Podcast, Chris Willis and Josh McBeain interview two colleagues who delve into the Consumer Financial Protection Bureau's (CFPB) recent interpretive rule that classifies buy now, pay later (BNPL) transactions as credit cards. Mark Furletti and Jason Cover explore the implications of this rule under Regulation Z, including the introduction of the term "digital user account" and its impact on BNPL providers. The discussion covers the regulatory requirements, potential challenges for compliance, and the broader legal context, including the possible effects of the Loper Bright case on administrative interpretations. With a July 30 compliance deadline looming, the episode provides critical insights for industry stakeholders navigating this significant regulatory shift.

In this episode of Payments Pros, host Keith Barnett discusses the Federal Trade Commission's (FTC) lawsuit and $10 million settlement against the payment facilitator, BlueSnap. On May 1, the FTC filed a complaint alleging that BlueSnap and its executives aided and abetted a debt relief service provider's violations of the Telemarketing Sales Rule, along with violating Section 5 of the FTC Act.

Keith highlights the FTC's allegations regarding BlueSnap's onboarding and due diligence processes, noting the issues that the FTC examines when investigating companies that facilitate payments, such as email correspondence, chargeback rates, fraud monitoring alerts, consumer complaints, and the circumstances under which the FTC believes a company should stop processing payments for merchants.

In this episode of Payments Pros, Carlin McCrory is joined by Nathan Ottinger, president of Georgia Banking Company's Payments and Technology Banking Group. They delve into the current state of the payments marketplace, characterized by heightened regulatory scrutiny and rapid innovation. Nathan underscores the importance of well-documented risk management strategies for financial institutions and the necessity for businesses to secure proficient legal counsel, particularly in the realm of money transmission.

Nathan shares how Georgia Banking Company strategically focuses on specific industry segments and payment types, consciously avoiding the allure of the latest trends in bank-fintech partnerships. He emphasizes the significance of cultivating direct client relationships, conducting thorough due diligence during the client onboarding process, and maintaining ongoing portfolio management and oversight.

Discussing payment technology innovations, Nathan highlights tools that enhance risk management and streamline processes. He concludes by reiterating the high ethical and regulatory standards required when handling other people's money, stressing the need for alignment between the client, the bank, and regulatory requirements.

In this episode of Payments Pros, Josh McBeain and Chris Willis discuss the Consumer Financial Protection Bureau's (CFPB) proposed rule on overdraft fees. The rule, which only applies to large financial institutions with assets over $10 billion, aims to regulate overdraft services by altering the definition of 'finance charge,' effectively subjecting these institutions to Regulation Z's disclosure and substantive provisions. Chris and Josh delve into the complexities of the proposed rule, considering its potential implications and the likelihood of litigation challenges from the industry. They also discuss the role of the Truth in Lending Act (TILA) and the concept of Chevron deference in this context.

In the final episode of the Payments Pros special two-part series, Jordan Bennett, Nacha's senior director of network risk management, joins Keith and Carlin to discuss the new rules regarding fraud monitoring.

Fraud Monitoring Phase 1 will become effective on March 20, 2026, and Phase 2 on June 19, 2026. These rules require all nonconsumer originators, ODFIs, third-party service providers, and third-party senders to establish and implement risk-based procedures to identify potential fraudulent transactions. The aim is to reduce the incidence of successful fraud attempts.

The group discusses that the rules do not prescribe a specific method for monitoring, allowing each party to adapt according to their needs. However, inaction is not an option. Parties should conduct a risk assessment and adjust their policies accordingly.

Jordan advises leveraging existing resources and ensuring contacts are prepared to respond to fraud incidents. He clarifies that these changes don't reallocate liability or establish new duties, but aim to foster teamwork in fraud prevention.