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they o ered a perspective from the other side. “Banks can have di erent interpretations of the same law,” notes Elena Sabkova, interim CEO, general counsel and chief compliance o cer at Skrill USA Inc. “Sometimes di erent banks will impose standards on vendors that are not the same.”
Rusty Pickering, general counsel and chief compliance o cer at Ingo Money echoes this point. “Being a vendor for a number of di erent banks can be “like having 10 to12 di erent regulators,” Pickering says.
Data Security
Recent high-pro le data breaches have generated legislative interest in data security, and many people
I interviewed are bracing for a urry of new legislation in 2016 that would impose data security and breach response requirements.
Ganging Up on Prepaid?
Several people I interviewed sug- gested that prepaid cards are being singled out for an unusually high level of focus compared with similar products. As most readers know, 2015 saw a wide range of government agencies and lawmak- ers take an interest in prepaid. New
The law is not keep- ing up with the
pace of innovation in the payments industry. ... This makes it challenging to provide business teams with concrete advice about what is and what is
not permissible.
—David Beam, Mayer Brown LLP
regulations came from the Depart- ment of Education. Congress is focused on the use of prepaid cards in tax fraud schemes (see page 66). Payroll cards are under assault in New York and elsewhere. And, as discussed above, the CFPB appears poised to impose restric- tions and requirements on prepaid accounts that will not apply to other kinds of transaction accounts.
Many legal and compliance profes- sionals believe that this unique focus on prepaid products results from misunderstanding about them. One senior counsel at a large prepaid provider lamented that some people have an “image of prepaid as the ‘currency of crimi- nals,’” which, unfortunately, seems
to be informing how regulators approach prepaid.
Educating policymakers about prepaid products is a key objective for the Network Branded Prepaid Card Association in 2016, accord- ing to the trade group’s Vice President of Government Relations Brian Tate. “This is a long-term play,” he says.
ConClUSionS
volume 9 • spring 2016
We are in one of the most excit- ing—if not the most exciting— times for the payments industry. However, it also may be one
of the most challenging times
for the lawyers and compliance personnel who support the pay- ments industry. The growth and innovation in payments unfortu- nately can lead to a proliferation
of regulatory requirements. Re- gardless of where they are focused, lawyers and compliance personnel at payment companies expect to
be busy in the year ahead.
David L. Beam recently joined Ma-
yer Brown LLP as a partner in the Washington, D.C., o ce. He is a member of the rm’s nancial services regulatory and enforcement group. David can be reached at DBeam@mayerbrown.com.
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