In April 2013, Morrison & Foerster published the client alert "CFPB Uses Novel Interpretation, Increases Compliance Burden for Gift Card Issuers Through its First Preemption Determination."
Summary:
On April 19, 2013, the CFPB announced it was making a determination to preempt a provision of Tennessee unclaimed property law that it deemed inconsistent with the federal Electronic Fund Transfer Act (EFTA), as implemented by Regulation E. The Tennessee interpretation, which has the potential to create operational and compliance issues for gift card issuers, was issued jointly with analysis that concluded Maine law is not inconsistent with the EFTA or Regulation E and, therefore, not preempted ("Determination"). The Determination marks the first time the CFPB has used its statutory authority to issue a Determination about the consistency of state and federal law.
To read the full alert, click here.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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