January 24, 2023

NAFCU’s Tetreau shares Reg E insights

fintech paymentAt the American Bar Association’s Consumer Financial Services Committee meeting, which concludes today, NAFCU Senior Regulatory Compliance Counsel Rebecca Tetreau provided insights on Regulation E during one of the event’s sessions.

Tetreau has closely monitored the CFPB’s efforts related to Regulation E since 2021; early last year she published one of NAFCU’s most-read Compliance Blog posts of 2022 reviewing the bureau’s updated FAQs and how its error resolution requirements apply to peer-to-peer (P2P) payments and providers.

In response to reports that the CFPB was reviewing Regulation E liability requirements last summer, including potential guidance that would seek to ensure financial depository institutions cover losses from consumer authorized transactions that are the result of scams, NAFCU’s advocacy team has shared concerns with lawmakers and regulators.

NAFCU President and CEO Dan Berger called this effort “deeply concerning,” arguing that an expansive interpretation of Regulation E could magnify credit unions’ exposure to fraud and curtail investments designed to help reach underserved communities, such as investments in brick-and-mortar branches. Rather than putting liability on credit unions, Berger recommended the bureau focus on ensuring fintechs have proper regulatory oversight and work to prevent fraud before it occurs.

NAFCU Senior Vice President of Government Affairs Greg Mesack also shared the repercussions of expanding Regulation E liability in a Wall Street Journal article, and a recent post on NAFCU’s Compliance Network further details the issue.

NAFCU will continue to monitor the CFPB’s efforts related to Regulation E and keep credit unions informed of compliance considerations.