In the second installment of the two-part Payments Year in Review series, hosts Keith Barnett, Carlin McCrory, and Jason Cover focus on the state-level developments that shaped the 2025 payments landscape and will influence 2026.
Suit Against Cannabis Giant Trulieve Underscores Cashless ATM Risks and the Need for Banking Reforms
In a February 19 complaint filed in Arizona state court, Texas-based payment processer Switch Commerce LLC argued that multistate cannabis operator Trulieve Cannabis Corp. and its affiliates should be responsible for a $950,000 fine from Visa for their alleged fraudulent use of “cashless ATMs” — not Switch.
State AGs and State Money Transmission Regulators Settle With Payment Processor Over Unauthorized Mortgage Withdrawals
On October 17, 52 state and territorial attorneys general, in addition to state money transmission regulators, entered into settlements amounting to more than $20 million with ACI Worldwide (ACI), to resolve claims involving a money transmission error that led to the unauthorized withdrawal of $2.3 billion from Nationstar Mortgage (also known as Mr. Cooper) customers.
Arizona AG Concludes Non-Recourse, No-Interest Earned Wage Access Products Are Not “Consumer Lender Loans” Requiring a License
Arizona Attorney General Mark Brnovich released opinion No. 22-(R22-011), concluding earned wage access (EWA) products that are fully non-recourse and no-interest are not “consumer lender loans” under Arizona law. Thus, those who make, procure, or advertise EWA products are not required to be licensed as a “consumer lender” by Arizona’s Department of Insurance and Financial Institutions. The AG’s findings apply to EWA providers working with an employer as well as those working directly with an employee.
Fed Launches FedNow Service Provider Showcase
On March 8, the U.S. Federal Reserve Banks launched the FedNow Service Provider Showcase (Showcase) to show financial institutions and users the various services to assist them in implementing the FedNow Service (Service).
The FedNow Service is an instant payment service to provide all depository institutions in the United States with access to instant payment
FTC Enters Consent Agreement with Payment Processor for Opening Merchant Accounts for Fictitious Companies
On March 15, the Federal Trade Commission (FTC or Commission) released a consent agreement with Electronic Payment Systems and its owners John Dorsey and Thomas McCann (collectively, EPS) for allegedly opening credit card processing merchant accounts for fictitious companies on behalf of Money Now Funding (MNF).
The complaint filed against EPS alleges that it had
California Passes Bill, Adding New Money Transmitter Requirements
On October 4, California passed a bill requiring a money transmitter to display a toll-free telephone number on its website through which a customer may contact the licensee for customer service issues and receive live customer assistance. The telephone number must be operative at least 10 hours per day, Monday through Friday, excluding federal holidays.
CSBS Releases Money Transmission Model Law
On September 9, the Conference of State Bank Supervisors (CSBS) released the Model Transmission Modernization Act (model law) in efforts to replace the 50 state-specific money transmitter laws with a nationwide standard. Unless the states adopt the model law, no change will occur to any existing state money transmission laws.
If enacted by the states,
California DFPI Signs First Memoranda of Understanding with Earned Wage Access Companies
The California Consumer Financial Protection Law (CCFPL) went into effect on January 1. The CCFPL requires the Department of Financial Protection & Innovation (DFPI), formerly the Department of Business Oversight, to establish an Office of Financial Technology Innovation (OFTI). The DFPI stated in its recent monthly bulletin that OFTI would allow it to “work proactively
CFPB Investigating Venmo’s Funds Transfer and Debt Collection Policies
In a recently filed Form 10-K, PayPal Holdings, Inc. (PayPal) announced that it received a Civil Investigative Demand (CID) from the Consumer Financial Protection Bureau (CFPB) on January 21 “related to Venmo’s unauthorized funds transfers and collections processes, and related matters.” PayPal owns and operates Venmo as part of its digital wallet portfolio.
While