Today in TechREG, the UK payments regulator published further details on Tuesday 21 June of upcoming market reviews of processing fees and cross-border interchange fees for Visa and Mastercard. The UK has also announced plans to introduce new regulations for short-term unsecured loans, including buy now, pay later, but the new rules are unlikely to be ready until mid-2023. In the United States, the director of the Consumer Financial Protection Bureau (CFPB) published a blog post saying that the agency was revising some long-standing rules like the Credit CARD Act and the Fair Credit Reporting Act.
UK BNPL regulation unlikely before mid-2023
The UK 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 are unlikely to be in place until mid-2023.
The new rules will require BNPL providers to carry out checks on consumers to ensure they can afford to take out loans, and lenders will also need to be approved by the Financial Conduct Authority (FCA). This announcement has been eagerly awaited by the industry since the government closed a consultation on the future of BNPL’s services in the country in January.
UK regulator to review Visa, Mastercard and Swipe card processing fees
The UK Payments Systems Regulator (PSR) on Tuesday (June 21) released details of two market studies it plans to carry out later this year on Visa and Mastercard processing fees and cross-border interchange fees.
For now, the PSR has just released a draft of the Market Review and it is accepting comments on these Terms of Reference (ToR) until August 2. Once the regulator receives feedback from stakeholders, it will publish the final ToR for the market review this fall.
TikTok pledges 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 announced on Tuesday (June 21). In February 2021, a European consumer organization sounded the alarm over some problematic TikTok practices that allegedly breached EU consumer protection 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 resolved and TikTok has pledged to change its practices, EU regulators have 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 considering changing its regulatory approach and revising some long-standing rules, including the Credit Cards 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 the very complicated rules that have long been a staple of consumer financial regulation and towards simpler, clearer rules.” This new approach, coupled with a “dramatic increase” in guidance, will help the agency more clearly communicate agency expectations in a simple and straightforward manner, according to the agency.
RBI to FinTechs: Non-banks cannot top up funds on prepaid wallets, cards
FinTechs have been alerted that non-bank issuers of prepaid payment instruments (PPIs) cannot load cards and digital wallets with funds via credit lines, the Reserve Bank of India (RBI) announced on Tuesday 21 June, according to multiple media sources.
“The PPI-master management does not allow the loading of PPI from credit lines. Such a practice, if followed, must be stopped immediately. Any non-compliance in this regard may result in criminal prosecution under the provisions contained in the Payments and Settlement Systems Act 2007,” according to the RBI circular issued to non-bank PPI issuers.