The Green Sheet Online Edition
September 11, 2017 • Issue 17:09:01
Are we out of the regulatory woods?
With the official close of Operation Choke Point in mid-August and then, not very long after that, the dismissal of a CFPB case against a number of processors (Global Payments was the biggest defendant) does this mean we can relax about the legal attacks inflicted upon us? I mean, people, good people, were driven out of business by DOJ overreach. Things have gone way too far. It would be good if those who provide processing to merchants day in, day out, 24/7/365, could catch a break.
Ronnie Graham, Merchant Level Salesperson
There is almost widespread agreement in the payments industry that Operation Choke Point, the government initiative to cut off designated industries from their ability to process payments, was harmful because it appeared to make no effort to distinguish between guilty and innocent parties. This goes against both the assumption of innocence until proven guilty and a general sense of fair play.
That said, the case brought by the Consumer Financial Protection Bureau against Global Payments Inc. , Frontline Processing Corp., Electronic Merchant Systems and Pathfinder Payment Solutions, wasn't dismissed on the merits of the case. It was dismissed because the CFPB refused to follow instructions the court issued in an effort to get the agency to be more cooperative in the discovery process. (For further details, see "Court strikes down case against payment processors" at www.greensheet.com/breakingnews.php?flag=breaking_news&id=1896.)
We expect the CFPB, Federal Trade Commission, Federal Deposit Insurance Corp. and other regulators will continue to keep an eye on the industry and bring actions against companies when the agencies believe they have uncovered evidence of wrongdoing. Unfortunately, based on feedback received on this page about bad actors proliferating in our industry, it appears this kind of measured oversight, while dreaded, is needed.
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