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Nicole Meisner

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Nicole chairs Taft’s PayTech and Payment Systems practice group. She counsels a wide range of companies in the payments and financial services industries, including acquiring banks, payment processors, independent sales organizations (ISOs), payment facilitators, marketplaces, mobile payment providers, FinTech companies, ACH providers, money transmitters, prepaid access providers, and digital currency companies.

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Recent federal activity is sending a clear message to banks and payment companies: “debanking” decisions can no longer be driven by vague notions of “reputational risk,” and institutions should expect greater scrutiny of how they evaluate, onboard, and offboard customers.

In the past several months, federal regulators have sharpened their focus on account terminations, onboarding denials, and other access decisions that may disproportionately affect certain industries or segments of customers. Those efforts are converging around a common theme: financial institutions…
Continue Reading Regulators Turn Up the Heat on “Debanking” Practices in Payments

The Eighth Circuit’s recent decision to vacate the Federal Trade Commission’s (FTC) new Negative Option Rule (commonly referred to as the “Click-to-Cancel” Rule) has created significant uncertainty for businesses in the payments and subscription industries. Many companies were preparing to comply with the now-vacated rule’s broad requirements, only to see them now nullified just before they were set to take effect. And while the court’s decision halts, for now, the FTC’s efforts in implementing the new Rule, it is important…
Continue Reading Eighth Circuit Vacates FTC Negative Option Rule: What’s Next for Automatic Renewal Compliance?

For years, “FBO” has been one the payments industry’s favorite buzz words. The FBO account structure has been a common “best practice” by payments providers seeking to remove themselves from the flow of funds to reduce their risk of being regulated as a money transmitter. As a foundational matter, FBO accounts are merely custodial depository accounts maintained at financial institutions and established “for the benefit of” (FBO) intended beneficiaries of funds in the accounts. The structures of such accounts can…
Continue Reading What is the Future of FBO Accounts?

This week, New York’s new surcharging law went into effect, replacing the prior surcharge ban which had been attacked at the U.S. Supreme Court (as discussed here). The old law was simply a wholesale ban on credit card surcharges, although since being reinterpreted by the New York Court of Appeals in 2018, it has not been enforced categorically. The new statutory language appears to be an attempt to codify the Court of Appeals’ interpretation under which surcharge programs are…
Continue Reading Sweeping Changes to Surcharging Practices in New York

Chicago Federal Reserve Bank Building
Joshua Woroniecki, Unsplash

On January 19, 2021, several federal banking regulators including FinCEN, the Federal Reserve, the FDIC, NCUA, and the OCC jointly issued answers to several frequently asked questions (FAQs) regarding suspicious activity reports (SARs) and other anti-money laundering (AML) considerations for financial institutions covered by SAR rules.  As used below, the term “financial institution” includes money services businesses.

Importantly, the FAQs do not alter existing BSA/AML legal or regulatory requirements, nor do they establish new supervisory expectations.  Instead, they are intended to clarify the regulatory requirements related to SARs to assist financial institutions with their compliance obligations.
Continue Reading New Joint Regulatory FAQs Regarding Suspicious Activity Reporting and other AML Considerations

Stock photo of the Business Man with a credit card by rupixen
rupixen.com, Unsplash

In light of the significant increase in chargebacks resulting from COVID-19, Visa, Mastercard and American Express recently issued guidance to assist acquirers, issuers, and merchants in navigating the dispute process. Below is a summary of that guidance. Visa On March 27, 2020, Visa released a bulletin titled “Managing Disputes Through COVID-19: Programs, Best Practices and FAQs to Help Clients” in which it provides guidance about managing and responding to disputes as a result of COVID-19.
Continue Reading Card Brand Guidance for Managing COVID-19 Related Chargebacks

New visualisation of the Covid-19 virus
Fusion Medical Animation, Unsplash

The Taft Paytech & Payment Systems team has prepared the following tips for ISOs, processors, payment facilitators, ISVs, money services businesses, and banks in light of COVID-19 developments.

  • Review Termination Rights and Implications. Contracts often include a force majeure clause that excuses nonperformance when it is caused by unforeseen events beyond the control of the parties. An evaluation of whether the current circumstances qualify as a force majeure event should be conducted. If the contract does not contain such a provision, there may be other remedies if you are unable to perform.
    Continue Reading Legal Impacts of COVID-19 on the Payments Industry
California flag with palm tree
Lesli Whitecotton, Unsplash

As of January 1, 2020, the California Consumer Privacy Act (CCPA) is now in effect. As we explained here, the CCPA imposes requirements on merchants and payment processors to protect personal information of California residents.

Enforcement of the law does not begin until July 1, 2020, which is good because the regulations interpreting the law have not even been finalized yet. The draft regulations, published this past October by California’s Attorney General, propose rules relating to consumer disclosures, processing consumer requests, and other implementation details. Final rules will be issued before the July 1, 2020 enforcement date.
Continue Reading California Consumer Privacy Act (CCPA) Goes into Effect

Oklahoma City
Gerson Repreza, Unsplash

Recent opinion provides welcome clarity on Oklahoma’s position on surcharge ban enforceability, relating to electronic payment processing

Judicial developments surrounding the legality of credit card surcharging have made keeping up with the latest news on this issue a challenge. Currently, there are several states with laws in place prohibiting surcharges. Merchants have challenged the constitutionality of these laws in court, sometimes with some confusing results.
Continue Reading Oklahoma AG: Surcharges OK

Kites flying outside the Kite Loft in Ocean City, Maryland. OCMD is a resort town in the U.S. state of Maryland between the Atlantic Ocean and Isle of Wight Bay. It features miles of beach and a wooden boardwalk lined with restaurants, shops and hotels. At the boardwalk's southern end, Trimper’s Rides has hosted theme-park attractions for decades. The surrounding waters are active with kayaks and tour boats, some of which journey to popular Assateague Island nearby. This photograph was take in 2020, by Jeff McLain. Please credit appropriately.
Jeff McLain, Unsplash

The Maryland legislature has passed legislation that, if signed by the Governor, will require merchant acquirers to revise their merchant applications and agreements. Under the proposed law, merchant services providers, financial institutions, independent sales organization (ISO’s), or any subsidiary or affiliate of those entities (“Credit Card Processors”) will be required to provide merchants with specific disclosures and notices clearly and conspicuously within the merchant agreement. We interpret this to include payment facilitators. There is also a cap on the fees or penalties that a Credit Card Processor can levy against a merchant for its cancellation of the merchant agreement.
Continue Reading Legislative Watch: New Merchant Agreement Requirements