ETA Submits Comments to the CFPB on the Payment Provisions of its Payday Rule

Ladies and Gentlemen,

The Electronic Transactions Association (the “ETA“) respectfully submits this letter to the Consumer Financial Protection Bureau (the “Bureau“) in response to its Rule on Payday, Vehicle Title, and Certain High-Cost Installment Loans, codified at 12 C.F.R. Part 1041 (the “Rule“), and its proposed retention of the Rule’s so called “payment provisions” contained at 12 C.F.R. §§ 1041.7-1041.9.  See generally 84 Fed. Reg. 4252 (Feb. 14, 2019) (proposing to rescind certain “mandatory underwriting provisions” of the Rule while retaining the payment provisions); 84 Fed. Reg. 4298 (Feb. 14, 2019) (proposing to delay the compliance deadline with respect to same).

Background

The ETA is the leading trade association for the payments industry, representing over 500 companies worldwide involved in electronic transaction processing products and services. The purpose of ETA is to influence, monitor and shape the payments industry by providing leadership through education, advocacy and the exchange of information.  ETAs membership spans the breadth of the payments industry to include independent sales organizations (ISOs), payments networks, financial institutions, transaction processors, mobile payments products and services, payments technologies, and software providers (ISV) and hardware suppliers.

ETA believes that the Rule’s current treatment of consumer payments initiated by a prepaid card or a debit card linked to a deposit account (each, a “Debit Card“) disadvantages both consumers and lenders by treating such payments as “payment transfers” subject to the requirements and prohibitions of the Rule’s payment provisions.  See 12 C.F.R. § 1041.8(a)(1)(i) (including all electronic fund transfers within the definition of “payment transfer”); Comment 8(a)(1)(i)(A) (clarifying that debit and prepaid card transactions are included within the definition of an electronic fund transfer).  Accordingly, the ETA believes that the Bureau should remove Debit Card transactions from the Rule’s payment provisions.

Read the full letter here.