Payments Laws Not “Well-Tailored” for Mobile, Fed Counsel Says

Stephanie Martin, Associate General Counsel for the Federal Reserve Board, wonders whether existing payments regulations are enough to cover the potential outcomes from new mobile technologies.

Given the rapid increase in the involvement of nonbank institutions in payments, Martin says that existing laws “may not be well-tailored to address the full range of mobile payment services in the marketplace.” For example, payments made through a telecommuications company (e.g., mobile carrier billing) may leave consumers with less access to legal protections relative to more traditional payment means.

Martin also raises the question of whether new nonbank payment players, like mobile carriers, might end up being subject to existing money transmitter laws, which tend to vary by state.

All of Martin’s comments were delivered to the Subcommittee on Financial Institutions and Consumer Credit, part of the House Committee on Financial Services, on Friday. Access her full testimony here.