Payments Pros – The Payments Law Podcast

In this episode of Payments Pros, Carlin and Keith welcome back Jordan Bennett, Nacha's senior director of network risk management, for a two-part series on the newly approved rules designed to combat credit push fraud. Credit push fraud has been on the rise, and Nacha released a risk management framework to increase awareness and mitigate such frauds.

The new rules, approved by Nacha's members on March 18, aim to mitigate fraud incidents such as business email compromise and efforts to exploit credit push payments. Part one of this series explores the risk management package, discussing the comprehensive set of rules and multiple rule amendments effective from October of the current year.

Jordan highlights that the effective dates for some rules extend into 2026, providing ample time for preparation. The rules package was carefully crafted to reduce incidents of credit push frauds and provide financial institutions with useful tools.

In addition to the rules, Nacha is also focusing on education and has released risk management guidance. The guidance is designed to help financial institutions improve their risk controls.

The new rules include amendments for fraud monitoring by all parties in the ACH network, new rules around fund recovery tools, standardization of certain data fields, and changes to the Written Statement of Unauthorized Debit (WSUD) process. The rules are designed to increase awareness of fraud schemes, reduce successful fraud attempts, and improve recovery after frauds have occurred.

Part two of this series will focus on fraud monitoring and what ACH Network participants can start doing now to comply with the recently passed rules.

In this episode of Payments Pros, Carlin McCrory is joined by Nick St. John, director of regulatory compliance at America's Credit Unions, to discuss the Corporate Transparency Act (CTA) and related developments from the Financial Crimes Enforcement Network (FinCEN). Enacted in 2021, the CTA aims to combat the use of anonymous legal entities for money laundering. It mandates that legal entities report their beneficial ownership information to FinCEN, which maintains a database accessible to law enforcement, financial institutions, and other entities that meet specific criteria.

Nick explains that the CTA applies to corporations and similar entities, with exceptions like banks and credit unions. Entities must report information about the company and its beneficial owners, defined as any person with a 25% or more ownership interest or who exercises substantial control. Reporting deadlines vary based on the company's creation date.

He also clarifies the difference between beneficial ownership reporting to financial institutions and the new reporting to FinCEN. Under the CTA, there is no numerical limit to the number of control persons that must be reported. Financial institutions can request this information for customer due diligence compliance requirements. Carlin and Nick conclude by discussing future developments from FinCEN, including when the information will be made available to financial institutions and changes to existing rules to align with the CTA.

In this special crossover edition of Payments Pros and The Consumer Finance Podcast, Chris Willis is joined by Josh McBeain and Glen Trudel. They discuss the recent final credit card late fee rule issued by the Consumer Financial Protection Bureau (CFPB) and the industry's reaction to it. The rule lowers the safe harbor provision dollar amount for late fees to $8 for large credit card issuers and increases it for small issuers. The team also discusses the legal challenge filed against the rule by a collective of trade groups. They speculate on potential industry responses if the rule survives legal challenges, such as increasing APRs, creating new fees, raising minimum payments, and tightening credit.

In this episode of Payments Pros, co-hosts Keith Barnett and Carlin McCrory discuss the Consumer Financial Protection Bureau's (CFPB) latest proposed rule. This rule aims to prohibit covered financial institutions from charging consumers nonsufficient funds (NSF) fees on transactions that are declined instantaneously or near instantaneously.

The CFPB believes this rule will benefit consumers who would otherwise incur NSF fees, potentially leading their accounts to drop to zero or below zero. However, it also acknowledges that financial institutions may become less willing to open depository accounts for these consumers, potentially increasing the number of unbanked and underbanked individuals.

The rule, proposed on January 24, is open for comments until March 25, and is expected to be finalized 30 days after publication in the Federal Register.

In this episode of Payments Pros, Keith Barnett is joined by Eli Polanco, founder and CEO of Nivelo, to discuss critical issues in payroll processing. They highlight the significant impact that the Money Transmitter Modernization Act (MTMA) will have on payroll processors in the states that have adopted the portion of the MTMA requiring payroll processors to obtain money transmitter licenses.

Eli explains the complexities introduced by the MTMA, including the need for payroll providers to navigate through state regulations. This has led to increased operational costs and uncertainty within the industry.

The discussion also covers the critical role of payroll providers and their bank partners in managing the movement of employee payroll across the country, which includes tax payments and garnishments. Eli emphasizes the importance of robust risk management practices and compliance with Nacha rules. Looking ahead, Eli predicts increased consolidation in the payroll industry and higher costs for payroll services due to regulatory pressures, which potentially stifles competition and innovation.