The Senate Banking Committee today continued its exploration of mobile payment systems and the potential need for new regulations, building on an earlier subcommittee session that heard from various industry and consumer groups (see Client Report PREPAID2). Although supportive of mobile payment, Chairman Johnson (D-SD) emphasized the need to ensure that there are no regulatory gaps with regards to emerging financial products. Ranking Member Shelby (R-AL) stated his support for regulatory clarity, but cautioned against placing mobile payment in a “strait jacket,” while Sen. Warner (D-VA) asked for more transparency on consumer fees. Regulators outlined issues, especially with regard to security and transparency, but did not expressly call for any new standards. Congressional interest in new payment systems has been a hot topic of discussion as of late, as evidenced also at last week’s FinServ hearing on mobile payment (see Client Report PAYMENT13). Chairman Johnson promised more hearings on mobile payment in the near future, with FedFin viewing all of these sessions as a run-up to CFPB regulation in the near term and legislation in the next Congress. This report analyzes today’s hearing.
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