b'announced its plan to prioritize the examination ofrule would require card issuers to enable at least two banks that are heavily reliant on overdraft fees, ornetworks for both cards where a physical debit card that impose a higher than average fee burden onis used, and to card-not-present-transactions. The consumers. Third, the Bureau stated that it intendstwo-network requirement would ensure merchants can to use technology to make it easier for consumers toselect a low-fee network when accepting consumer change banks, allowing them to avoid being trap[ped]payments. The FTCs comments emphasizes the need by banks into accounts with heavy fees. for issuers to provide sufficient options for merchants to accommodate the rapid growth of mobile and COVID-19-Related Flexibility on Regulation electronic payments during the COVID-19 pandemic. In Z Enforcement Rescinded addition, the FTC also called on the Federal Reserve to The CFPB rescinded various policy statements issuedpromulgate rules prohibiting debit card networks from in response to the COVID-19 pandemic providingexploiting an issuers position by paying incentives to temporary regulatory and compliance flexibility tothe issuer based on how merchants route electronic financial institutions, three of which applied to creditdebit transactions using that issuers debit cards.or prepaid card issuers. First, the Bureau rescinded its guidance relating to Regulation Z billing error resolution timelines. The prior guidance allowed the CFPB to2021 Highlightsconsider creditors circumstances and refrain fromCFPB Enters Into Consent Order With JPay Over citing a violation or bringing an enforcement actionPrepaid Debit Cards Issued to Incarcerated Personswhen billing resolution takes longer than required, soIn October, the CFPB announced that it had entered long as the creditor made a good faith effort to get allinto a consent order with JPay, LLC, a financial services necessary information, made a determination as quicklycompany that provides prepaid debit cards to currently as possible, and complied with all other applicableincarcerated persons and those recently discharged error resolution requirements. That guidance hasfrom incarceration, resulting in a total recovery of $6 now been rescinded. Second, the Bureau rescindedmillion. JPay provided prepaid debit card services to its policy statement that loosened informationincarcerated consumers pursuant to contracts with collection requirements for credit card and prepaidvarious departments of corrections. The prepaid account issuers, directing issuers to prepare to meetdebit cards provided by JPay were used to provide all information collection requirements under TILA,consumers with the funds owed to them at the time of Regulation Z, and Regulation E by April 2021. Third,release, including the consumers own commissary or the CFPB rescinded its statement allowing for flexibilitytrust funds and any Gate Money provided to consumers in electronic card disclosures, and issuers must againat the time of their release in order to meet their basic obtain a consumers E-Sign consent during over-the- needs. The CFPB alleged that JPay violated the EFTA phone transactions.by requiring consumers to establish a prepaid card FTC Issues Comment on Proposed Rule to Requireaccount as a condition of receiving a government Fair Competition Between Debit Card Gatekeepers benefit, violated the CFPA by providing fee-bearing In August, the FTC announced the submission of aprepaid cards to consumers who were required to use comment urging the Board of Governors of the Federalthe cards to receive money owed to them at the time Reserve to clarify and strengthen the implementationof their release, and violated the CFPA by charging of debit card fee and routing reforms under the EFTA.unauthorized fees and making misrepresentations The comment was submitted in response to a proposedabout those fees to consumers. Under the terms of rulemaking by the Federal Reserve. The proposedthe consent order, JPay agreed to pay $4 million 29'