Payments News Update – February 21, 2025
Legal and Regulatory Developments
SPOTLIGHT: CFPB Agrees to Pause Rumored Workforce Layoffs, Data Purge
Bloomberg Law – February 14, 2025
Consumer Financial Protection Bureau employees got at least a two-week reprieve from an expected culling of the workforce after their union and the agency agreed to let a federal judge rule on the merits of the planned staff cuts and other efforts to shutter the watchdog.
The National Treasury Employees Union said in a Thursday court filing that it anticipated acting Director Russell Vought would fire up to 95% percent of its workforce as early as Friday. A subsequent filing from Erie Meyer, the agency’s former chief technologist and adviser to the director, claimed that Vought planned to delete the agency’s trove of sensitive data.
Those moves are now on hold after the union and the CFPB on Friday agreed to a briefing schedule that would allow Judge Amy Berman Jackson of the US District Court for the District of Columbia to rule on the union’s bid for a preliminary injunction seeking to block Vought’s actions. . . .
Waller Sees Stablecoins Advancing in Retail
Payments Dive – February 20, 2025
There are signs of stablecoins creeping into retail payments, but they’ll need regulatory oversight and a path to scaling if there is to be widespread use in the marketplace, said Federal Reserve Governor Christopher Waller.
In a conference speech last week in San Francisco, Waller gave an update on his stablecoin thinking three years after outlining what he saw as the digital asset’s risks and benefits. He defined stablecoins as digital assets designed to offer a stable value, relative to a fiat currency, and be easily converted to a traditional currency. He noted that most are backed by the U.S. dollar.
The stablecoins issued by the company Circle Internet Group and Tether are two of the most widely used. Stablecoins generally have been in existence for about a decade. . . .
What Trump’s Plan to Stop Minting Pennies Means for Consumers
The Wall Street Journal – February 14, 2025 (subscription may be required)
President Trump said Sunday that he had asked the U.S. Treasury Department to stop minting new pennies, part of an effort to cut down on what he called wasteful government spending.
His remarks revived a long-running debate over whether to get rid of the smallest denomination of U.S. currency. Here’s a look at what it means for American consumers.
It cost 3.7 cents to make one in 2024. That is up from 3.07 cents in 2023, 2.7 cents in 2022 and 2.1 cents in 2021. It costs so much more to make a penny than its value that the U.S. Mint reported losing some $85.3 million last year on the nearly 3.2 billion pennies it produced. . . .
City of Baltimore and National Treasury Employees Union File Separate Suits to Keep the CFPB Funded and Operating
Consumer Finance Monitor – February 14, 2025
Accusing the CFPB of planning to use its funding mechanism to abolish the agency, the mayor and the city council of Baltimore (the “City of Baltimore”) and the Economic Action Maryland Fund (the “Economic Fund”), a nonprofit economic assistance organization, are asking a federal judge to keep the bureau from folding.
“The Trump administration—acting through Defendants CFPB and its Acting Director, Russell Vought—now seeks to do by fiat what opponents of the CFPB were unable to do in Congress or the courts,” the City of Baltimore and the Economic Fund, said, in a lawsuit filed in the U.S. District Court for the District of Maryland.
They further asserted that the Trump Administration is effectively defunding the agency, leaving it unable to carry out its duties under federal law. . . .
Industry Developments
SPOTLIGHT: Payments Players Mull New Approaches to Fraud
Payments Dive – February 18, 2025
Companies in the payments sphere, whether banks, tech titans or networks, are seeking and implementing new methods to combat push-payment fraud scams robbing consumers and corporate customers.
They’re advocating increased sharing of data, more action from law enforcement and a better way to track identities in the digital world, among other ideas to better battle scammers tricking victims into sending payments.
These are scams in which a company or a consumer are duped into sending, or pushing, a payment to criminals posing online as someone — such as a company representative or law enforcement official — they are not. . . .
Mastercard Launches One Credential to Give Gen Zers Access to Multiple Payment Methods via a Single Card
Digital Transactions News – February 19, 2025
Mastercard Inc. announced early Wednesday the launch of One Credential, a digital-payment solution that supports multiple payment methods such as credit, debit, and prepaid, as well as installment loans, on a single card.
Targeted primarily at Gen Zers, One Credential allows consumers to tailor their payment methods to better manage their personal finances. For example, a One Credential user can opt to pay for household expenses using her checking account, and pay for larger purchases using an installment loan. Users can also set dollar-amount limits that trigger the account that will be used to pay for a purchase, such as any purchase over $100 automatically being charged to the user’s credit card. Users can set their preferences online or through the One Credential app, which also provides an overview of users’ spending. . . .
How Phished Data Turns Into Apple & Google Wallets
Krebs on Security – February 18, 2025
Carding — the underground business of stealing, selling and swiping stolen payment card data — has long been the dominion of Russia-based hackers. Happily, the broad deployment of more secure chip-based payment cards in the United States has weakened the carding market. But a flurry of innovation from cybercrime groups in China is breathing new life into the carding industry, by turning phished card data into mobile wallets that can be used online and at main street stores.
If you own a mobile phone, the chances are excellent that at some point in the past two years it has received at least one phishing message that spoofs the U.S. Postal Service to supposedly collect some outstanding delivery fee, or an SMS that pretends to be a local toll road operator warning of a delinquent toll fee. . . .
Chase Will Soon Block Zelle Payments to Sellers on Social Media
BleepingComputer – February 17, 2025
JPMorgan Chase Bank (Chase) will soon start blocking Zelle payments to social media contacts to combat a significant rise in online scams utilizing the service for fraud.
Zelle is a highly popular digital payments network that allows users to transfer money quickly and securely between bank accounts. It is also integrated into the mobile apps of many banks in the United States, allowing for almost instant transfers without requiring cash or checks but lacking one crucial feature: purchase protection.
In a recent update to its user policy, Chase explained that the payments service should not be used to buy goods from retailers or merchants, “including on or through social media or social media marketplaces or messaging apps.” . . .