Legal and Regulatory Developments

SPOTLIGHT: Trying to Revive the CCCA, Durbin and Marshall Look to Make It an Amendment to the GENIUS Act
Digital Transactions News – May 21, 2025

Sponsors of the Credit Card Competition Act moved late Tuesday to attach the legislation as an amendment to the GENIUS Act, a proposed bill to regulate stablecoins.

While the Senate must approve the move, it potentially gives the legislation new life as it failed to advance out of committee in the Senate during the last Congress. The GENIUS Act, or the Guiding and Establishing National Innovation for U.S. Stablecoins Act, passed a preliminary vote in the Senate, setting up a final vote on the legislation.

The proposed amendment to the GENIUS Act states that credit card issuers cannot “restrict” the “number of payment card networks on which an electronic credit transaction may be processed” to one or two networks. . . .

CAT Approves £200m Mastercard Settlement Amid Bitter Funding Dispute
The Global Legal Post – May 20, 2025

The Competition Appeal Tribunal (CAT) has formally approved a £200m settlement in the landmark collective action brought by Walter Merricks against Mastercard, concluding nearly a decade of litigation over interchange fees.

The 80-page ruling, handed down this morning by Mr Justice Roth, confirms the tribunal’s earlier indication that the settlement was “just and reasonable”, despite being significantly lower than the original £16bn claim.

It comes against the background of a bitter falling-out between Merricks and the funder, Innsworth Capital, which opposed the deal and launched arbitration proceedings against him after the terms were agreed. . . .

Senate Advances a Major Crypto Regulation Bill on a Bipartisan Vote
NBC News – May 19, 2025

The Senate advanced a major cryptocurrency regulation bill Monday on a bipartisan vote two weeks after every Senate Democrat united to block it.

The procedural vote on the GENIUS Act — which would establish the first regulatory framework for issuers of stablecoins, digital tokens pegged to fiat currencies like the U.S. dollar — was 66-32. Sixteen Democrats voted with the majority of Senate Republicans to advance the bill. Two Republicans, Sens. Rand Paul of Kentucky and Jerry Moran of Kansas, voted against it.

The bill needed to cross the 60-vote threshold to advance to final passage in the Senate, where Republicans hold a three-seat majority. . . .

UK Clamps Down on ‘Wild West’ of Buy Now, Pay Later Sector With New Rules
CNBC – May 19, 2025

The U.K. government on Monday laid out proposals to bring short-term loans under formal rules as it looks to clamp down on the “wild west” of the buy now, pay later sector.

Fintech firms like Klarna and Block’s Afterpay have flourished by offering interest-free financing on everything from fashion and gadgets to food deliveries — while at the same time stoking concerns around affordability. The space is highly competitive, with U.S. player Affirm launching in the U.K. just last year.

City Minister Emma Reynolds said in a statement Monday that the U.K.’s new rules were designed to tackle a sense of “wild west” in the buy now, pay later (BNPL) space, adding the measures “will protect shoppers from debt traps and give the sector the certainty it needs to invest, grow, and create jobs.”. . .

CFPB Seeks to Block States From Enforcing Federal Laws
American Banker – May 19, 2025 (subscription required)

The Consumer Financial Protection Bureau has withdrawn guidance from the Biden administration that had expanded states’ rights, allowing individual states to broadly enforce violations of federal consumer protection laws.

The CFPB under former CFPB Director Rohit Chopra interpreted the Consumer Financial Protection Act of 2010 broadly, and wrote an interpretive rule that allowed states to bring claims against banks and financial institutions not only under the CFPA, but also under federal laws such as the Truth in Lending Act or the Fair Credit Reporting Act. . . .

FTA to Defend Open Banking in Court
Payments Dive – May 15, 2025

The Financial Technology Association can intervene in a lawsuit bank trade groups brought seeking to quash a Consumer Financial Protection Bureau rule outlining a new U.S. open banking system, a federal judge ruled on Wednesday.

The association argued that the bureau was unlikely to defend its members’ interests in a case brought by banking groups over implementation of the open banking rule. “While it is still uncertain whether the CFPB will defend the Rule in issue, it seems that, at the minimum, the FTA’s interests are likely not protected by the current parties,” U.S. District Judge Danny Reeves in Lexington, Kentucky, wrote in the ruling.

Neither the CFPB nor the plaintiffs – the Bank Policy Institute, the Kentucky Bankers Association and Kentucky-based Forcht Bank – opposed the FTA’s motion to intervene in their briefs filed Monday. . . .

Retailers Urge European Commission to Crack Down on Visa, MasterCard
Reuters – May 14, 2025

Europe’s largest retailers and online retail companies have urged the European Commission to rein in allegedly high fees charged by Visa and Mastercard, saying they hurt the bloc’s competitiveness and hamper rivals.

Visa and Mastercard dominate the market for payment cards and have in recent years faced complaints from retailers about their fees, and what retailers say is a lack of transparency on these fees. The two U.S. companies process about two-thirds of card payments in the euro zone.

The retailers’ grievances have in part prompted the 27-country European Union to look into alternatives such as a digital euro to lessen dependence on American payment providers. The slow legislative process on a digital currency, however, has frustrated some policymakers and businesses. . . .

Industry Developments

SPOTLIGHT: Capital One Completes Acquisition of Discover
UPI – May 18, 2025

Capital One Financial Corporation has completed its acquisition of former credit card rival Discover Financial Services, the companies announced on Sunday.

Capital One announced its intentions to acquire Discover in February 2024, stockholders of both companies voting in favor of the $35 billion deal a year later and federal regulators approving it in April.

“This deal brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses, and merchants,” Capital One CEO and founder Richard D. Fairbank said in a press release. . . .

Banks Struggle to Talk About Fraud
Payments Dive – May 15, 2025

Financial institutions are facing a flood of fraud, from push-payment scams to business email compromises to bad checks. Nonetheless, they’re often stymied in trying to work together to root out bad actors.

That was painfully clear to attendees listening to several panel discussions at the Nacha Smarter Faster Payments conference last month. The industry event attracted about 2,100 payments, bank and credit union professionals between April 27 and April 30 in New Orleans.

Push-payment schemes, also known as credit-push fraud, that move over Nacha’s ACH and other electronic payment rails have been particularly problematic. In these situations, consumers and companies are duped into sending payments to criminals under false pretenses, but because they do so voluntarily, it’s more difficult to combat. . . .

PayPal Changes the iPhone for Good With Apple Pay Alternative for Millions of Users
Forbes – May 14, 2025

Apple iPhone users know how easy it is to make payments. Until now, the convenient tap-to-pay system has been restricted to Apple Pay. But now, users in Germany can use their iPhones for PayPal payments as well — a move that will see the iPhone quietly transformed forever.

Apple users in other countries can expect to be able to use PayPal instead of Apple Pay on their devices in the future, and since PayPal is such a trusted brand, it’s likely many will switch.

This capability came about because of the Digital Markets Act which saw Apple open parts of iOS up to other companies in EU countries. Now, third-party apps can access payments, too. . . .

Read Payments News Update – May 23, 2025 at constantinecannon.com