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NAFCU Senior Counsel for Research and Policy Andrew Morris wrote to the CFPB Monday in response to the agency’s request for comment regarding its Paperwork Reduction Act (PRA) notice for Regulation E. In the letter, Morris shares NAFCU’s concerns around the allocation of error resolution responsibilities in the context of peer-to-peer (P2P) payments.

In the letter, Morris draws attention to potential uncertainty around investigations of ‘token errors’ as described in the bureau’s Fall 2021 Supervisory Highlights.

“To mitigate the compliance challenges associated with payment error investigations (and their associated information collection burdens), NAFCU asks that the Bureau clarify expectations around token error investigations, which may be difficult for a credit union to conduct without access to certain information, particularly when the underlying transfer involves a P2P service,” wrote Morris.

In summary, NAFCU recommends that the bureau do the following:

• clarify expectations around token error investigations by specifying that for P2P transfers, P2P providers be primarily responsible for investigation token errors; and
• consider ways to achieve a more equitable balance of error resolution responsibilities that may be shared between financial institutions and P2P payment service providers.

“NAFCU supports clear and fair rules governing error resolution procedures for financial institutions,” concluded Morris. “By clarifying expectations for token error investigations and considering a more equitable framework for allocating Regulation E responsibilities when transfers involve P2P services, the Bureau will improve consumer outcomes by supporting a more efficient error resolution process.”

Read the full letter here. NAFCU will continue to work with the CFPB to ensure credit unions have the tools necessary to operate efficiently and smoothly.