TCH, joined by the Bank Policy Institute (BPI) and the Consumer Bankers Association (CBA), submitted a comment letter on the CFPB’s proposed interpretive rule on electronic fund transfers through accounts established primarily for personal, family, or household purposes using emerging payments mechanisms (the “Emerging Payments Rule”).  In the letter, the associations argued that the Emerging Payments Rule suffers from both procedural and substantive deficiencies and should be withdrawn.  

Procedurally, the Emerging Payments Rule aims to effect substantive changes to the coverage of the Electronic Fund Transfer Act (EFTA) and its implementing regulation, Regulation E, and thus should have been implemented through full notice and comment rulemaking.  On the merits, the Emerging Payments Rule would adopt new definitions of the terms “funds” and “accounts” that are too vague and unclear to provide meaningful notice to the market about which types of asset accounts will be newly covered by Regulation E.  Further, application of Regulation E to these new types of asset accounts raises complex compliance questions that the Emerging Payments Rule critically does not address. 

A copy of the letter may be found here.