Credit score Card Reward ‘Bait and Change’ Techniques Face CFPB Scrutiny
The Client Monetary Safety Bureau is making ready to take a more in-depth take a look at bank card rewards applications. CFPB Director Rohit Chopra stated his company is eyeing new steerage for the way the Digital Fund Switch Act, a 1978 regulation governing digital funds, applies to what he known as “non-public digital {dollars}” and different digital currencies, together with crypto. Specifically, Chopra stated the CFPB is worried about potential “bait and swap” techniques deployed by bank card corporations to entice individuals into signing up for rewards plans. [Bloomberg Law]
The CFPB is making ready to take a more in-depth take a look at bank card rewards applications
Hamas Militants Behind Israel Assault Raised Thousands and thousands in Crypto
Hamas’s lightning strike on Israel final weekend has raised the query how the group financed the shock operation. One reply: cryptocurrency. Throughout the yr main as much as the assaults, three militant teams—Hamas, Palestinian Islamic Jihad and their Lebanese ally Hezbollah—acquired massive quantities of funds by means of crypto. Digital-currency wallets that Israeli authorities linked to the PIJ acquired as a lot as $93 million in crypto between August 2021 and June this yr, evaluation by main crypto researcher Elliptic confirmed. Wallets linked to Hamas acquired about $41 million over the same time interval. [The Wall Street Journal]
U.S. Small Companies Lean on Credit score Playing cards Amid Inflation and Funding Challenges
A brand new Intuit report underscores an alarming development: small companies closely depend on their bank cards amidst the present financial local weather. Publish-pandemic bank card spending by these entities has shot up by a mean of 20%. Nonetheless, this rise in spending is accompanied by a big 26% enhance in month-to-month bank card funds, inclusive of curiosity fees. [Small Business Trends]
Boomers Attain for Credit score Playing cards, Millennials Lean Extra on BNPL to Pay for Leisure Journey
Bank cards proceed to be the popular alternative amongst shoppers for financing their leisure journey bills, with roughly two-thirds of those that traveled or meant to journey this summer season opting to make use of bank cards for his or her funds. Based on insights detailed in a brand new research, whereas bank cards stay the popular alternative for almost all of vacationers, there are distinct variations between older and youthful generations. Older generations are likely to go for bank cards, whereas the youngest generations lean extra towards BNPL choices. [PYMNTS]
People Are Deep in Credit score Card Debt, however Bidenomics Threatens to Make Issues Even Worse
Credit card debt has hit report highs, a transparent signal that many People are struggling to remain afloat throughout this time of “Bidenomics.” Ballot after ballot reveals that the majority People totally perceive that Bidenomics has resulted in rampant inflation, huge authorities debt and a more durable atmosphere for middle-class America. The guiding philosophy of Bidenomics is that the federal government is finest suited to drive down costs and make financial selections on behalf of People. This mentality has produced a number of failed insurance policies similar to hefty subsidies for electrical automobiles, market-distorting value controls for prescribed drugs, strict limitations on oil and gasoline extraction, and large handouts for large companies and blue state governments. [Fox Business]
Israeli Victims’ Credit score Playing cards Reportedly Abused by Terrorists after Hamas Onslaught
Hamas terrorists have allegedly stolen bank cards from Israeli victims to make purchases after launching their murderous rampage on Saturday, which has left greater than 1,000 civilians useless and wounded 1000’s extra. “Because of the safety scenario, we’ve seen instances the place bank cards and checking account data are being misused,” the Financial institution of Israel stated in a press release. “These conditions have been handled for the reason that outset by professionals on the Financial institution of Israel.” The central financial institution stated that it has established a particular Banking Supervision Division crew to work in cooperation with authorities and safety personnel to deal with the bank card theft instances. [The Times of Israel]
How Purchase Now/Pay Later Fintechs Are Reframing Client Credit score
Preliminary issues about purchase now/pay later loans cannibalizing bank card issuers’ market share have not come to fruition, however as BNPL fintechs tweak their merchandise, their loans are trying extra like conventional bank cards. Giant BNPL fintechs like Klarna, Affirm and Afterpay, which noticed robust adoption with on-line retailers through the pandemic, are transferring aggressively into brick-and-mortar shops, with branded debit playing cards sporting credit score card-like options and costs. Touted as handy for on a regular basis use, the debit playing cards steadily allow customers to transform a purchase order right into a mortgage on the level of sale or afterward. One other vital change is BNPL fintechs’ latest introduction of subscription charges averaging about $5 a month for customers to proceed accessing zero-interest loans, not not like the price of a bank card’s annual charge. [American Banker]
Rep. Santos Faces New Expenses He Stole Donor IDs, Made Unauthorized Expenses to Their Credit score Playing cards
U.S. Rep. George Santos stole the identities of donors to his marketing campaign after which used their bank cards to ring up tens of 1000’s of {dollars} in unauthorized fees, in line with a brand new indictment. He then wired among the cash to his personal private checking account, prosecutors stated, whereas utilizing the remaining to inflate his marketing campaign coffers. The 23-count indictment filed Tuesday replaces one filed in Could in opposition to the New York Republican charging him with embezzling cash from his marketing campaign and mendacity to Congress about his wealth, amongst different offenses. [Associated Press]
CFPB Plans to Rent 50% Extra Enforcement Attorneys, Assist Workers
The Client Monetary Safety Bureau is embarking on a hiring spree, rising the variety of full-time staff in its enforcement division by 50% and hiring extra employees in its authorized, operations and analysis, monitoring and rules divisions. CFPB Director Rohit Chopra has allotted about 75 new full-time staff to the enforcement division. The CFPB has roughly 150 enforcement attorneys and help employees. The hiring is without doubt one of the largest recruitment drives on the company. [American Banker]
PayPal Sued in U.S. Client Case Over Business-Excessive Transaction Charges
Funds big PayPal was hit with a shopper antitrust lawsuit for allegedly fashioning agreements with e-commerce retailers that artificially preserve excessive transaction charges. The potential class-action lawsuit from two shoppers in California and Georgia alleged PayPal’s contracts bar retailers from utilizing value incentives to steer shoppers to probably cheaper cost choices. The lawsuit stated PayPal, which owns Venmo, imposes the very best transaction charges amongst cost processors. The case is the primary ever to accuse PayPal of violating U.S. competitors regulation by means of its “anti-steering” guidelines. [Reuters]
Don’t Purchase Your Powerball Ticket with a Credit score Card
Whereas it could be tempting to snag a lottery ticket proper now because the Powerball Jackpot spikes to $1.73 billion, the second largest in historical past, shopping for your ticket with a bank card may value you. A lottery ticket bought with a bank card is prone to be processed as a money advance, which leaves you with excessive charges and no rewards. [CNBC]
