Today in TechREG, the U.K. Payment Regulator on Tuesday (June 21) published more details of the upcoming market reviews on Visa and Mastercard’s processing fees and cross-border interchange fees. The U.K. also announced plans to adopt new regulation for unsecured short-term loans, including buy now, pay later, but the new rules aren´t likely to be ready until mid-2023. In the U.S., the director of the Consumer Financial Protection Bureau (CFPB) published a blog post saying the agency is reviewing some long-standing rules like the Credit CARD Act and the Fair Credit Reporting Act.
UK BNPL Regulation Unlikely Before Mid-2023
The U.K. government announced on Monday, June 20, plans to tighten rules on the buy now, pay later (BNPL) sector aimed at protecting users — but new rules aren’t likely to be in place until mid-2023.
The new rules will require BNPL providers to carry out checks on consumers to ensure that they can afford to take out loans, and lenders will also need to be approved by the Financial Conduct Authority (FCA). This announcement was long-awaited by the industry since the government closed a consultation in January about the future of BNPL services in the country.
UK Regulator to Review Visa, Mastercard Processing and Swipe Fees
The U.K. Payment Systems Regulator (PSR) on Tuesday (June 21) published details of two market reviews that is planning to conduct later this year on Visa and Mastercard’s processing fees and cross-border interchange fees.
For the time being, the PSR has just published a draft of the market review and it is accepting comments on these terms of reference (ToR) until Aug. 2. Once the regulator receives comments from stakeholders, it will publish the final ToR for the market review this fall.
TikTok Commits to Align With EU Rules to Protect Consumers
TikTok has agreed to align its practices with European Union rules on advertising and consumer protection, the European Commission said on Tuesday (June 21). In February 2021, a European Consumer Organization raised the alarm regarding certain problematic practices of TikTok allegedly breaching EU consumer rules. Following the complaint, the Commission, led by the Irish and Swedish consumer authorities, launched a dialogue with TikTok. The series of concerns have now been addressed and TikTok committed to change its practices, EU regulators said.
It’s Official. CARD Act, Credit Rules, Now Under CFPB Review
The director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, announced in blog post that the agency is planning to change its approach to regulations, and is reviewing some long-standing rules, including the Credit CARD Act of 2009, the Fair Credit Reporting Act and the CFPB’s Qualified Mortgage Rules.
According to Chopra, the CFPB is “seeking to move away from highly complicated rules that have long been a staple of consumer financial regulation and towards simpler and clearer rules.” This new approach, together with a “dramatic increase” of guidance, will help the agency to more clearly communicate the agency’s expectations in a simple and straightforward manner, the agency says.
RBI to FinTechs: Non-Banks Can’t Reload Funds to Prepaid Wallets, Cards
FinTechs were alerted that non-bank issuers of prepaid payment instruments (PPIs) can’t load cards and digital wallets with funds through credit lines, the Reserve Bank of India (RBI) announced on Tuesday (June 21), according to multiple media sources.
“The PPI- master direction does not permit loading of PPIs from credit lines. Such practice, if followed, should be stopped immediately. Any non-compliance in this regard may attract penal action under provisions contained in the Payment and Settlement Systems Act, 2007,” according to the RBI circular addressed to non-bank PPI issuers.
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