Legal and Regulatory Developments

SPOTLIGHT: FTC Holds off on Enforcing ‘Click to Cancel’ Subscription Rule
PYMNTS – May 11, 2025

What if canceling a subscription were as easy as signing up for one? That was the thinking behind the Negative Option Rule — more popularly known as the “click to cancel” regulation, first proposed in 2023.

That rule went into effect earlier this year, with enforcement originally scheduled for May 14. Now, the Federal Trade Commission (FTC) says it will give businesses more time before the click-to-cancel rule goes into effect.

The commission voted Friday (May 9) to delay enforcement for 60 days, to give companies more time to prepare. . . .

Nevada Bill Would Charter New Payment Banks
Payments Dive – May 13, 2025

A bill in the Nevada Assembly would offer a special charter for new payment banks, aiming to allow financial technology companies and others to access federal payment rails and help merchants bypass many of the expenses associated with traditional card payments.

The new licensing system would allow retailers, payment processors, remittance companies and others to apply as banks for direct access to U.S. payment systems like ACH, FedWire and FedNow.

As a result, Nevada retailers – and potentially consumers – would benefit from lower transaction costs for credit and debit cards, say supporters of the proposal. Card payments carry interchange fees that U.S. merchants have decried for years as both excessive and onerous. . . .

NY to License, Supervise BNPL Providers
The Green Sheet – May 13, 2025

While the federal government has eighty-sixed its oversight of buy now, pay later (BNPL) lenders, New York state is taking up the mantle. New York Governor Kathy Hochul just signed legislation that establishes a licensing and supervision framework for companies offering BNPL in the state.

The legislation was tucked into the state’s fiscal year 2026 budget, along with several other consumer protection laws. The other laws would: • Make it easier for consumers to cancel online subscriptions • Standardize online retail return and refund policies • Cap overdraft fees • Require businesses to disclose clearly when prices are set using personal data collected from a consumer’s online activity (sometimes referred to as surveillance pricing). . . .

Crypto-Backed Stablecoin Bill Gets Bipartisan Push for Quick Revival in Senate
Bloomberg – May 13, 2025 (subscription may be required)

Senators in both parties are working to quickly revive stablecoin legislation backed by the crypto industry that faltered after a furor over President Donald Trump’s growing portfolio of lucrative crypto ventures.

Republican Senator Bill Hagerty of Tennessee, the lead sponsor of the legislation, said in an interview at the Capitol that staff in both parties have continued to work on the legislation. He expressed hope that Democrats would agree to pass the bill before the Memorial Day recess, given that the Senate will soon focus on the GOP’s signature tax and spending package.

“The window is now,” he said. “We will see if reasonableness will prevail.” . . .

Trump Signs Rollbacks of Biden-Era Overdraft, Digital Wallet Rules
The Hill – May 12, 2025

President Trump signed two congressional rollbacks of Biden-era rules from the Consumer Financial Protection Bureau (CFPB) that sought to cap overdraft fees and ramp up oversight of digital wallets.

The two rules were finalized in the last few months of the Biden administration, leaving them vulnerable to the lookback provision of the Congressional Review Act (CRA).

The CRA allows Congress to overturn regulations put forward by federal agencies, including those finalized near the end of the previous session during the so-called lookback period. . . .

Stablecoin Bill Falters in Senate
Payments Dive – May 12, 2025

A landmark bill seeking to create a new framework for stablecoins failed to get the necessary Senate votes to advance after Democrats blocked it, raising concerns about President Donald Trump and his family benefiting from crypto.

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, a first-of-its-kind bill backed by the crypto industry, drew a 48-49 procedural vote in the Senate on Thursday, but advancement would have required 60.

Sen. Mark Warner, D-VA, voted against the legislation and emphasized the need for the U.S. to set a standard for responsible innovation in the digital financial space. . . .

CFPB Rescinds 67 Pieces of Guidance
Banking Dive – May 12, 2025

The Consumer Financial Protection Bureau withdrew dozens of pieces of prior guidance Monday, according to a document published to the Federal Register on Friday.

The 67 rescinded items include guidance regarding fair lending, overdraft fees, buy now, pay later firms, earned wage access programs and more, in alignment with an internal memo Chief Legal Officer Mark Paoletta sent last month.

“[T]he Bureau is committed to issuing guidance only where that guidance is necessary and would reduce compliance burdens rather than increase them. Historically, the Bureau has released guidance without adequate regard for whether it would increase or decrease compliance burdens and costs. Our policy has changed,” CFPB Acting Director Russ Vought wrote Monday. . . .

Texas Takes Aim at ‘Swipe’ Fees, Drawing Ire From Banks, Credit Issuers
Dallas Morning News – May 8, 2025 (subscription may be required)

Separate bills making their way through the Texas legislature have banks and consumer advocates on edge, posing challenges to the state’s financial infrastructure and its pro-business bent.

At issue are two sets of bills regulating credit card processing fees, which collectively set a record of nearly $188 billion last year, according to Nilsen Report data. While they can cost individuals hundreds of dollars per year in transaction fees, that money helps fund credit card perks and reward programs that consumers have embraced. . . .

Industry Developments

SPOTLIGHT: First-Party Fraud Rockets in 2024, Despite Overall Fraud Rates Flattening, LexisNexis Says
Digital Transactions News – May 13, 2025

First-party fraud, also known as “friendly fraud,” accounted for 36% of all fraud globally in 2024, up from 15% the previous year, says LexisNexis Risk Solutions’ Cybercrime report.

First-party fraud occurs when a consumer disputes a legitimate credit card transaction, claims he never received the order, or misrepresents personal information on loan or card applications.

LexisNexis Risk Solutions analyzed more than 104 billion global transactions in the LexisNexis Digital Identity Network platform during 2024, the most ever analyzed for the annual report. The LexisNexis platform identifies attempted fraud online in near real-time, such as new account creations, logins, payments, and password resets and transfers, according to the company. . . .

Exclusive: Meta in Talks to Deploy Stablecoins Three Years After Giving Up on Landmark Crypto Project
Fortune – May 8, 2025 (subscription may be required)

In 2019, Meta announced an audacious project: a new cryptocurrency that could be used across Facebook, WhatsApp, and a host of other digital platforms. The company, though, pulled the plug on its plans in the face of withering opposition from Congress and other lawmakers.

Now, Meta is testing the crypto waters again. According to five sources familiar with the matter, the company is in discussions with crypto firms to introduce stablecoins as a means to manage payouts, and has also hired a vice president of product with crypto experience to help shepherd the discussions. All five sources, whose identities are known to Fortune, spoke on the condition of anonymity to talk about private business dealings. . . .

Read Payments News Update – May 16, 2025 at constantinecannon.com