Legal and Regulatory Developments

SPOTLIGHT: Republicans Pressure Fed on Debit Card Fees
Payments Dive – April 14, 2025

Republicans on the House Financial Services Committee are seeking to reverse a late 2023 Federal Reserve decision that would cut fees that large financial institutions can charge merchants when consumers use debit cards to pay for goods and services.

The 14 Republicans, including the committee’s chairman, Rep. French Hill, wrote to Fed Chairman Jerome Powell late last month to urge him to “withdraw” the proposal, saying that a reduction in the amount the banks that issue the cards can collect would hurt smaller banks, boost other fees and undercut fraud prevention. It was one of several recommendations the group made regarding banking regulations.

A Fed spokesperson said the central bank had received the letter and planned to respond, declining to comment beyond that statement. . . .

Under Trump, Consumer Watchdog to Slash Industry Supervision
Reuters – April 16, 2025

The top U.S. watchdog agency for consumer finance will cut its inspections of financial services companies in half while focusing on threats to military personnel and turning away from areas like student loans, medical debt, digital payments and consumer data, according to a memo sent to staff on Wednesday.

The decision indicates the U.S. Consumer Financial Protection Bureau intends to continue supervision and enforcement activities even though President Donald Trump and billionaire Elon Musk, whom Trump charged with overseeing government cost-cutting efforts, earlier this year called for the agency’s elimination.

The changes, however, point to a fundamental reorientation of priorities away from areas that had been core to the CFPB’s work in previous administrations. . . .

Judge Tosses Biden-Era CFPB Rule Capping Credit Card Late Fees
The Hill – April 15, 2025

A federal judge in Texas tossed a former President Biden-era Consumer Financial Protection Bureau (CFPB) rule that capped credit card late fees at $8 after both sides on the issue agreed that it was illegal.

U.S. District Judge for the Northern District of Texas Mark Pittman allowed the dismissal on Tuesday pushed by both the group of six banking and business interest groups and the consumer watchdog agency.

Pittman, a President Trump appointee, said the rule, which was finalized by the CFPB last year during the Biden administration, violated the Credit Card Accountability and Disclosure Act of 2009 because it failed to allow card issuers to “charge penalty fees reasonable and proportional to violations.” . . .

CFPB’s Vought Wants to Strip Away ‘Guidance’ en Masse
Banking Dive – April 15, 2025

Consumer Financial Protection Bureau Acting Director Russ Vought wants to take “guidance” down a peg.

In a memo Friday, Vought ordered the heads of eight offices within the bureau, including enforcement and supervision, to review by April 25 any guidance documents the agency has issued, with the aim of rooting out instances when guidance was used as a substitute for the more formal regulation process.

“The use of guidance to regulate is unlawful and deprives the public of fair notice of what conduct is prohibited,” Vought wrote in the memo seen by Fox Business and American Banker. “The Bureau will no longer engage in this practice. Effective immediately, Bureau components may not issue guidance documents that purport to create rights or obligations binding on persons or entities outside the Bureau.” . . .

Industry Developments

SPOTLIGHT: Global Payments to Buy Worldpay in $24bn Deal
Financial Times – April 17, 2025 (subscription may be required)

Payments provider Global Payments has struck a $24.2bn cash-and-stock deal to buy rival Worldpay from GTCR less than two years after the private equity group bought a majority stake in the company.

As part of a three-way deal announced on Thursday, GTCR will receive 59 per cent of the deal value in cash and the remainder in Global Payments stock.

Fintech group FIS, which owned a 45 per cent stake in Worldpay, will take control of Worldpay’s issuer solutions arm, valued at $13.5bn. . . .

Visa Is Joining the Paxos, Robinhood Stablecoin Consortium: Sources
Coindesk – April 14, 2025

Visa is joining the Global Dollar Network (USDG), a stablecoin consortium convened by U.S. regulated digital asset firm Paxos, alongside cryptocurrency and fintech heavyweights like Robinhood, Kraken and Galaxy Digital, according to two people familiar with the plans.

Visa is the first traditional finance incumbent known to be joining USDG, whose initial cohort of members also includes Anchorage Digital, Bullish (the owner of CoinDesk) and Nuvei. . . .

Are Stablecoins a Threat or an Opportunity for Banks?
PYMNTS – April 10, 2025

Banks have always evolved to provide more effective systems to serve their customers. But while historically that evolution was relatively linear, as the financial world continues to digitize, banks are faced with a growing array of options to meet customer needs.

Stablecoins — cryptocurrencies pegged to fiat currencies such as the U.S. dollar — have moved from niche assets to instruments that could redefine how money moves, where it is stored and who controls it.

For traditional banks, stablecoins represent a dual-edged proposition: both a disruptive force and a potential avenue for innovation. With the news that Tether is considering offering a U.S.-only stablecoin, the central question is whether banks will be disintermediated, or whether they can co-opt the technology to evolve their roles in a changing financial landscape. . . .

Read Payments News Update – April 18, 2025 at constantinecannon.com