Legal 500 USA

This country-specific Q&A provides an overview of fintech laws and regulations applicable in United States.

Authors: Jeffrey D. Silberman Herbert F. Kozlov Maria B. Earley Christine Parker Peter A. Emmi Trevor A. Levine

1. What are the sources of payments law in your jurisdiction?

Payments laws in the United States consist of an array of regulatory regimes administered by both state and federal regulators. The primary purpose of these regimes is to protect consumers, facilitate orderly and efficient transfers of value and prevent money laundering and other illegal activities involving payments.

At the federal level, payments touch a number of financial industry statutes and regulations, including the Consumer Credit Protection Act, Bank Secrecy Act, Gramm-Leach-Bliley Act, Electronic Funds Transfer Act and Reg. E, Dodd-Frank Act, Expedited Funds Availability Act, Reg. CC, Reg. J, Reg. II, and the Uniform Commercial Code. At the state level, payments are generally covered by money transmission, auto-renewal, surcharge, and prepaid access laws. The federal and state statutory regimes governing payments is supported by periodic rulemakings and guidance issued by regulators.

In addition to governmental oversight, the payments industry has developed certain standards by which participants must abide. For example, the Payment Card Industry Security Standards Council administers and maintains payment card industry data security standards (PCI-DSS) for those who process, store or transmit cardholder data. Similarly, the National Automated Clearing House Association (NACHA) issues operating rules and guidelines for automated clearing houses (ACH) while the major card networks – American Express, Discover, MasterCard – each have sets of rules governing card payments facilitated on their respective payment rails.

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