Latest Payments News: Ireland Makes Fraud A Priority In Programme For Government, and more

Catch up on six of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

Ireland Makes Fraud A Priority In Programme For Government

The incoming Irish administration’s programme for government includes a dedicated section on tackling fraud in the financial services sector, showing how much of an issue it has become for policymakers.

The measures outlined in the policy document include collaborating with agencies and industry stakeholders to implement the National Payment Strategy, which will establish a fraud database.

Additionally, the government has said that it plans to explore the feasibility of an SMS scam filter, designed to function like email spam filters to reduce scam messages.

The programme also commits to advocating for national and EU legislation that would restrict online platforms from advertising financial products unless the companies are regulated by their competent national authority.

This initiative aims to combat such things as impersonation fraud, while enhancing consumer protection.

CFPB Accuses Capital One Of 'Cheating' Its Customers

The US Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against credit card Capital One and its parent company, Capital One Financial Corp.

The lawsuit accuses the bank of misleading millions of consumers and depriving them of more than $2bn in interest payments.

According to the CFPB, Capital One promoted its "360 Savings" account as offering one of the nation’s “best” and “highest” interest rates.

However, the bank allegedly froze the rate at a low level even as interest rates surged nationwide.

At the same time, Capital One introduced a nearly identical product, “360 Performance Savings”, which offered significantly higher interest — up to 14 times more than the 360 Savings account.

The lawsuit alleges that Capital One intentionally obscured the existence of the better-paying account from its 360 Savings customers, failing to notify them of the alternative.

This practice, according to the CFPB, resulted in substantial financial losses for millions of account holders.

The CFPB is seeking to halt Capital One’s allegedly unlawful practices, secure financial redress for affected consumers and impose civil penalties, with any penalties collected to be added to the CFPB’s victims relief fund.

“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts,” said CFPB director Rohit Chopra.

“Banks should not be baiting people with promises they can’t live up to.”

FDIC Signals More 'Open-Minded' Approach To Emerging Tech

A top official at the US Federal Deposit Insurance Corporation (FDIC) has said banks are likely to be given more freedom to experiment with emerging payments technologies under the incoming Trump administration.

Travis Hill, who was appointed vice chair of the FDIC in 2021, has signalled that the agency will take a more “open-minded” approach to innovation and technology under President Trump.

“There is a healthy balance between allowing banks to evolve with the times and ensuring that they continue to manage risks prudently,” he said, “and in recent years, the FDIC has done a poor job striking that balance.”

In a speech on “charting a new course” in FDIC policy, Hill said he hopes that FDiTech, a Trump-era innovation lab, will be “reinvigorated” under the new administration.

Previously, FDiTech had engaged directly with the private sector, helping the FDIC to understand the challenges banks face with technology adoption and to develop solutions.

While the FDIC’s current leadership has “abandoned” this model, Hill said he expects it to return once Trump takes office.

With regard to specific emerging technologies, he also said the FDIC should consider issuing additional guidance on bank-fintech partnerships, artificial intelligence (AI), digital assets and tokenisation.

On digital assets, he said the FDIC “sorely needs” a “reset” of its current approach to the sector.

He acknowledged, for example, the damage caused by the FDIC’s sending of letters to more than 20 banks during 2022, asking them to “pause” “all crypto-related activity”.

“This approach has stifled innovation and contributed to a public perception that the FDIC is closed for business if institutions are interested in anything related to blockchain or distributed ledger technology,” he said.

“I continue to think a much better approach would have been — and remains — for the agencies to clearly and transparently describe for the public what activities are legally permissible and how to conduct them in accordance with safety and soundness standards.

“And if regulatory approvals are needed, those must be acted upon in a timely way, which has not been the case in recent years.”

Bank Of England To Launch Digital Pound Lab In 2025

The Bank of England (BoE) has announced plans to launch the Digital Pound Lab, a financial innovation sandbox designed to explore the feasibility and potential of a UK-issued central bank digital currency (CBDC).

The central bank has said that this type of simulated environment will enable hands-on experimentation with application programming interfaces (APIs), use cases and new business models, providing insights into the CBDC's potential as a platform for innovation.

To support the lab, the BoE will also begin publishing design notes, outlining emerging ideas and fostering discussions with stakeholders. The first of these, a blueprint framework, has already been released.

The initiative builds on work that has been conducted through forums and advisory groups, including the CBDC Engagement Forum and the Academic Advisory Group.

“Given the technical nature of our current work in the design phase, our focus is presently on engagement with specialist stakeholders whose perspectives and expertise are critical to delivering high-quality technical design work and a robust assessment of a digital pound’s potential,” the central bank said in its update on progress.

The lab's efforts will be complemented by the newly established Payments Vision Delivery Committee, which aims to coordinate regulators and prioritise payments initiatives.

The work will be overseen by the joint HM Treasury and BoE Digital Pound Taskforce, ensuring coherence across governance bodies.

New York, UK Regulators Set To Exchange 'Senior Experts' In Emerging Payments

Regulators in London and New York have introduced a secondment programme for staff with a background in emerging payments technology and digital assets.

On Monday (January 13), the New York Department of Financial Services (DFS) announced the launch of the Transatlantic Regulatory Exchange (TRE) with the Bank of England (BoE).

The TRE is an international secondment programme that allows the DFS and other regulators to exchange staff, enabling greater sharing of resources, knowledge and regulatory approaches.

The first TRE secondment will commence in February 2025, and will see the DFS and the BoE exchange senior staff with expertise in emerging payments and digital assets.

At the DFS, the secondment position was advertised to internal candidates with demonstrated expertise in digital payments, distributed ledger technology (DLT), virtual currency or digital assets.

Secondments will be a minimum of six months in duration and will be extendable by up to one year, by mutual agreement of both regulators.

The secondees are expected to return to their home regulator where they can apply their insights, knowledge and experience to work on regulation of emerging financial services and technologies.

Adrienne Harris, superintendent of the DFS, said the exchange will lead to stronger regulatory frameworks, increased consumer protection and greater innovation in both jurisdictions.

“In a world where financial services are not defined by geography, connecting the two global financial capitals of New York and London is critical for regulatory harmonisation,” she said.

Sarah Breeden, deputy governor for financial stability at the BoE, also said the two regulators will benefit from closer engagement.

“By sharing our knowledge and learning from one another, we can better ensure that regulation supports global financial stability and safe innovation in payments and financial markets,” she said.

Nepal Tightens Rules For Payments Firms With New Directive

Nepal Rastra Bank (NRB) has introduced significant regulatory updates for microfinance institutions (MFIs) with the release of a new circular targeting microfinance institutions, including money transfer services and payment providers.

Provisions set out in the new circular include compliance with the Nepal Financial Reporting Standards (NFRS) and the adoption of stricter risk management frameworks.

Larger institutions are now mandated to maintain a minimum capital adequacy ratio of 5 percent.

The directive also places an emphasis on digitalisation in digital payments, and requires institutions in scope to implement platforms for loan management and repayments.

Annual audits and compliance reports must be submitted to the NRB, with penalties or restrictions for non-compliance.

To support these changes, the NRB has said that it encourages partnerships with local technology firms to bolster their systems.

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