The piece by Budnitz describes how low-income consumers use digital payment systems, and how poverty affects their ability to benefit, or not, from digital financial services. It also examines whether current laws protect low-income consumers, and analyzes three ways that could potentially protect low-income consumers using the payment systems. While Budnitz is retired, he still has credentials with Georgia State.
Budnitz’s paper suggests the FTC and the Consumer Financial Protection Bureau can, and should be, looking out for low-income consumers’ interests. The CFPB has engaged in a flurry of activity this month, taking aim at “junk fees,” warning against immigration status-based discrimination in lending and unveiling an open-banking proposal meant to help consumers break up with banks over bad service.
In his paper, Budnitz called on the CFPB to do more. In particular, the government agency should require services like Zelle, a peer-to-peer payment tool offered by the company Early Warning Services, to provide warnings to consumers. The agency should also monitor these services and amend regulations to provide the same level of protections afforded by checks and credit cards, the paper said.
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