Law and regulation

MasterCard Inc. settled a lawsuit Monday, the same day it was filed by the Department of Justice, regarding payment network rules that prohibit so-called merchant steering.

Elizabeth Warren, the top Obama administration official in charge of setting up the Consumer Financial Protection Bureau, made it clear late Wednesday that she intends to target financial disclosures as one of her top priorities.

One unexpected result of new, lower signature-debit interchange rates many insiders expect to go into effect next year could be a boost in merchants’ acceptance of contactless payments, one analyst contends.

No one knew exactly how much revenue banks stood to lose from the new overdraft regulations. But nearly everyone assumed it was a big number.

Despite the uncertainties surrounding debit card programs caused by the pending overhaul next year of debit card interchange rates, certain alternative payment-network operators say they are seeing an uptick of interest from card issuers and merchants.

Regulatory reforms may help MasterCard Inc. steal debit card market share from Visa Inc., but it's not clear whether that would do much for its bottom line.

The Federal Reserve Board or the planned Consumer Financial Protection Bureau likely will have considerable input into any future regulation regarding network-branded reloadable prepaid debit cards, two industry observers suggest.

MasterCard Worldwide expects to increase its U.S. debit market share as a result of new network-routing rules included in pending federal changes in debit card interchange policies, Chris McWilton, MasterCard’s U.S. Markets president, said Sept. 23 at the company’s symposium for media and analysts at its headquarters in Purchase, N.Y.

Bharti Airtel Ltd. has become the first mobile operator in India to receive a license from the Reserve Bank of India to offer mobile-payment services, the New Delhi-based company announced Sept. 22.

As community banks adjust to big rule changes on overdraft fees, a new threat looms in the courtroom.

US Search Inc., an online data broker that charged consumers $10 based on a promise that it could lock their records so others could not see or buy them, has agreed to settle Federal Trade Commission charges that its claims were deceptive and violated federal law.

The Federal Trade Commission moved to strengthen an enforcement program aimed at stopping deceptive mortgage advertising by proposing a rule to ban all material misrepresentations in advertising about consumer mortgages.

A federal judge allowed a member to sue Pentagon FCU for breach of contract and discrimination after it canceled his Visa account, allegedly because his income dropped following a railroad injury.

Indiana Attorney General Greg Zoeller announced that his office will file lawsuits against three credit repair companies he believes defrauded three consumers of more than $12,000.

The Central Bank of Sri Lanka is soliciting public comment on guidelines it has drafted for mobile-payment systems, an official from the bank tells PaymentsSource.The bank’s director of payments and settlements is accepting comments through Oct. 18, according to the official. “Our aim is to ensure safety and effectiveness of mobile-payment schemes,” he says. Under the draft guidelines, the central bank will allow mobile payments in Sri Lanka only through licensed banks, registered finance companies and custodian account-based systems operated by nonbank service providers. Banks and financial institutions would be allowed to offer mobile-payments services to their accountholders, which would allow customers to operate their accounts via their mobile phone. Under the custodian account-based system, mobile operators may open e-money accounts for customers and issue e-money in exchange for actual money from customers, according to the guidelines.The central bank would allow mobile-payment services to be conducted only in Sri Lanka rupees and only for domestic transactions, and providers must route all foreign inward remittances to mobile accounts through the custodian banks and credit them in rupees. The draft rules also would require mobile-payments providers to report any suspicious transactions based on the guidelines of the central bank’s Financial Intelligence Unit. The draft also requires providers to use security measures to prevent criminal activity while using Near Field Communication-based mobile-payment systems.

The State Bank of Vietnam reportedly has again denied a request by banks in that country to allow them to charge their own customers fees when using their ATMs to withdraw cash. They also failed to receive permission to increase the ATM surcharge fees they charge noncustomers.

More than three-fourths of bank customers did not pay any debit card overdraft fees over a recent 12-month period, suggest survey data the American Bankers Association released Sept. 15.

North Dakota Attorney General Wayne Stenehjem is warning residents to watch for people posing as collectors of payday loan debts. The scammers call individuals and threaten legal action unless payment is authorized from a bank account.

A claims administrator for the Federal Trade Commission on Thursday began mailing more than 22,000 checks to consumers who were victims of a deceptive telemarketing operation called Remote Response.