This blog is an excerpt from the article “3 Disruptive Payment Trends Wracking Nerves across the Movement” published on CUinsight.
In my previous posts — “Shifts in the Payments Landscape” and “EMV Influences the Future of Payments” — I highlighted two of the three trends impacting the payments industry today. The third trend is definitely challenging what financial institution (FI) leaders know about implementing and maintaining a successful (and compliant) payments program.
Trend #3: The Evolution of the CFPB
The Consumer Financial Protection Bureau (CFPB) is an agency that helps consumer finance markets work by making rules and regulations more effective. In the agency’s view, it does this by consistently and fairly enforcing those rules and by empowering consumers to take more control over their economic lives.
No question FI executives agree with the consumer-protection spirit of new regulations. At the same time, the burden of compliance has been known to stifle innovation — something FI leaders know they need to harness to remain relevant and desirable for consumers of the future. It becomes especially dicey for innovators when clear rules and regulations are still evolving, as is the case with the CFPB’s governance over services like mobile payments.
To succeed as innovators, FIs are forced to work within a box — a box becoming potentially smaller with each passing amendment. While exemptions for credit unions and community banks have great intention, the reality is that often regulations, like the debit interchange cap, trickle down to these FIs in one way or another.
What can community FIs do to better navigate a changing payments landscape?
Fortunately credit unions and community banks have a tremendous support system, with help available through state leagues, vendor partners and consultative providers, like TMG and affiliate company, regulatory-firm PolicyWorks. Many of these organizations offer free consultations and open-access resources from white papers to webinars. TMG, for example, hosted a recent podcast and one-hour webinar on the future of payments for any FI leader who feels the weight of new competition, EMV and regulations, and wants to understand the available options.
