Newsroom

CFPB Director Richard Cordray on Thursday urged payment operators to prioritize consumer protection during remarks he made at The Clearing House in connection with electronic payment systems, debit card networks and the emergence of faster payments.

Cordray talked about the bad actors within the electronic payment systems and how they can victimize consumers. "When bad actors take advantage of weaknesses in the automated payments system, consumers can find themselves paying for charges they never authorized or later revoked," he said.

He also spoke about the lack of transparency in the payment system – including the ACH system. "When consumers make a deposit into their bank or credit union account, it is often difficult for them to know when the money will be available for their use," he noted. He said for many consumers this can lead them to over-withdraw from their accounts and face a fee from their financial institutions. He said the bureau is currently looking into "whether regulatory changes are warranted to address some of these concerns."

The latest survey responses from NAFCU's Economic & CU Monitor show that credit unions do a good job of helping those members who do over-withdraw their accounts. The survey found that every respondent offered members an alternative to overdraft or courtesy pay programs and that 91.2 percent of respondents reversed overdraft charges on a case-by-case basis.

When discussing faster payments, Cordray applauded The Clearing House for announcing plans to build a real-time payment system and urged the group to make the initiative a priority. He said a faster payment system should bring with it faster access to funds a consumer deposits and real-time access to account information, among other things.

The Federal Reserve is due to release its roadmap for speeding up the payments system by the end of the year.

NAFCU's Strategic Growth Conference, March 11-13 in Savannah, Ga., will have in-depth discussions on current and emerging trends in the payments system. Register by Jan. 16 to save $100.