Facts Matter: CFPB Attempts to Use a Blog Post to Rewrite a 46-year-old Payments Statute (WESTON LOYD, 5/30/24, CBA)
Remarkably, the CFPB asks the court to rewrite the plain language of the Electronic Fund Transfer Act, and effectively reverse decades of settled law. By issuing the blog post, the CFPB presumably would apply this new “rule” to the industry at large.
Key Findings
The Electronic Fund Transfer Act and the implementing regulation, CFPB’s Regulation E, clearly excludes Wire Transfers.
Yet the CFPB now asserts that wire transfers initiated via electronic means are covered under Regulation E (rendering Regulation E’s exclusion meaningless).The CFPB’s new interpretation of Regulation E would reverse decades of court decisions as well as the CFPB and Federal Reserve’s own prior regulatory filings.
Attempting to stretch electronic payments laws beyond their bounds is not a viable solution to address scams and fraud. Scams and fraud are serious, interdisciplinary problems. The financial services industry is working with stakeholders across other private sector industries, but need the CFPB and other agencies to commit to collaborating thoughtfully and earnestly in order to reduce the risks consumers face from scams and fraud.