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ARTICLE · 09 AUGUST 2021

Third Party Payment Processors As ‘Covered Persons': A Return To CFPB Regulation By Enforcement?

Alston & Bird
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A&B ABstract: The CFPB has recently asserted extraordinary authority to make any payment processor monitor the activities of any merchant for which it processes payments, even if that merchant...

United StatesConsumer Protection
Brian Johnson
Brian Johnson

A&B ABstract: The CFPB has recently asserted extraordinary authority to make any payment processor monitor the activities of any merchant for which it processes payments, even if that merchant does not provide consumer financial products or services. Does its argument hold up?

The CFPB's Complaint Against BrightSpeed

On March 3, 2021, the Bureau of Consumer Financial Protection (Bureau or CFPB) announced that it had filed a complaint in federal court against BrightSpeed Solutions Inc. and its founder and former CEO (collectively, BrightSpeed). The Bureau's complaint alleges that before ceasing operations in 2019, BrightSpeed was a privately owned third-party payment processor that processed remotely created check payments for its merchant-clients. According to the Bureau, these merchant-clients purported to provide antivirus software and technical-support services to consumers, but actually scammed consumers into purchasing unnecessary and expensive

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