June 4, 2026

Jennifer M. Jones, Deputy Executive Secretary
Federal Deposit Insurance Corporation

Re: RIN 3064–AG19; GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions

Dear Ms. Jones:

Introduction

I am the Bobby Lee Cook Professor of Law Emeritus at Georgia State University College of Law. I have published over 40 law journal articles, mainly on electronic payment systems. I am submitting these comments in my personal capacity.

It is imperative that the FDIC issue a Final Rule that does as much as possible to ensure consumers are adequately protected when they purchase, use and redeem payment stablecoins.

The GENIUS Act provides consumers with none of the federal protections they have when they use credit and debit cards. Consumers using payment stablecoins risk losing their money with no legal recourse if there is a problem.

However, the FDIC can partially alleviate consumer harm because the GENIUS Act does provide limited protection in regard to redemption. In addition, other state and federal consumer laws could aid consumers. The FDIC should adopt regulations that take advantage of these avenues to protect consumers.

Specifically, the FDIC’s Final Rule should adopt the “two business day” redemption requirement. But the FDIC should strengthen it by defining “business day.” The Final Rule also should add necessary redemption disclosures. The Final Rule should protect consumer privacy and prohibit issuers from providing credit to consumers. Furthermore, the Final Rule should make it clear that federal consumer protection laws apply and state consumer laws are not preempted.

The GENIUS Act does not adequately protect consumers

Consumers enjoy significant federal and state legal protections when they use credit and debit cards. These include extensive disclosures, limited liability when there is unauthorized use of a card, a mandated error resolution procedure and the right to sue if there is a violation of these laws. The GENIUS Act provides none of these fundamental protections consumers expect and rely on. In addition, the Act provides no limit on fees, allows issuers an unreasonably short time to notify consumers of an increase in the fees they charge, fails to cover third parties, and includes no privacy safeguards.

State and federal governments have enacted various consumer protection laws that payment stablecoin consumers may benefit from. However, because of the Act’s confusing language, it is not clear how to interpret and apply the Act’s treatment of these laws.

The FDIC should work with other regulators to ensure the maximum possible consistency in their final rules

In its proposed rules, the FDIC makes the following statement:

[T]he FDIC seeks comment on the extent to which the primary Federal payment stablecoin regulators should further align in their final rules to promote consistency of regulations applicable to all PPSIs subject to the GENIUS Act.

The FDIC should definitely seek to make its final rules consistent with those of the other regulatory agencies to the extent relevant. Consumers will be deciding which payment stablecoins to purchase depending on a variety of factors. It is likely some issuers will be subject to the FDIC’s rules, while others will be subject to the rules of other federal and state agencies.

If there are inconsistent rules, some may be more protective of consumer interests than others. It is likely many consumers will consider buying payment stablecoins from several issuers, each subject to the rules of different federal, and in some instances, state regulators. It is unreasonable to expect consumers will obtain a copy of the rules for each issuer consumers are considering and compare them in order to decide which issuer to choose. A lack of consistency will result in consumer confusion; consistent rules will enable consumers to comparison shop and select the payment stablecoins best for them.

Consistency also will benefit the industry. It is unlikely that many consumers will switch from debit and credit cards with which consumers are comfortable to the new world of cryptocurrency unless they trust the system in which payment stablecoins operate. They will not trust issuers if they are confused by a lack of consistency in the rules issuers must follow.

However, protecting consumers should not be sacrificed in order to achieve the maximum possible consistency. The effort to have consistent rules must not result in a “race to the bottom.”

In my comments below I point out specific areas where consistency is essential.

The FDIC’s Final Rule should include a “two business days” redemption requirement

Redemption is the most important right granted consumers in the Act. Without the ability to promptly and easily redeem their funds, consumers risk not being able to pay for essentials such as food, rent, a mortgage and car payments.[1] Consequently, it is essential that the FDIC’s rules ensure that consumers can effectively exercise their right of redemption.

However, the Act merely requires issuers to provide “timely” redemption. That provides no guidance for issuers and invites abuse by issuers and hardship for consumers. Problematic issuers may take advantage of this vague requirement to harm consumers.

The FDIC’s proposed rule corrects this serious deficiency in the Act. It provides that “timely redemption may not exceed two business days following the date of the requested redemption.”[2]

The Office of the Comptroller of the Currency’s proposed rules also require issuers to redeem holders’ payment stablecoins within two business days.

Consistency among all regulatory agencies is necessary. If the agencies had different deadlines for redemption, consumers would be confused about one of the most important rights they have when engaging in payment stablecoin transactions.

In Question 71, the FDIC asks whether other timeframes should be considered. The alternatives suggested in the question would introduce complexity, subjectivity, and possible manipulation. Consumers, especially those with limited discretionary income and urgent needs, deserve the certainty and clarity of the two day rule.

The FDIC’s Final Rule should define “business days”

The FDIC’S proposed rule requiring redemption within two business days after the consumer requests redemption is a welcome and necessary clarification of the Act’s mandate that redemption be timely.

However, it is unfortunate that the FDIC, like the OCC, does not define “business days” in its proposal. Issuers may prominently use the two-business-day guarantee in their marketing. But different consumers may have different understandings of what constitutes a “business day” and this will lead to confusion.

For example, many banks are open for at least part of Saturday. Consumers may reasonably believe only Sunday and national holidays are not business days. Online financial institutions allow consumers to do banking 24/7. Is every day a business day?

The regulations should specify whether two business days excludes Saturdays, Sundays, and/or national holidays. Issuers should be required to disclose what is meant by two business days to prospective customers and periodically to current customers.

In addition, the FDIC should require issuers to disclose to consumers prior to purchase and thereafter that under certain circumstances, the FDIC may extend the redemption time well beyond two business days.

In drafting its Final Rule, the FDIC should keep in mind the interrelationship among the Act’s failure to limit fees, the seven-day change of terms provision, and the possibility that the FDIC may decide to extend the redemption period beyond the two days. For example, if an issuer decides to substantially increase its fees, many consumers may rush to redeem their payment stablecoins in order to avoid the fee increase before the seven day period expires. That may trigger a run that threatens the financial viability of the issuer’s reserves, causing the FDIC to extend the redemption period. If the redemption period is extended for a substantial period of time for even one issuer, consumers may lose their trust and confidence in all issuers.

The FDIC should improve its disclosure requirements

The Act requires issuers to publicly disclose “all fees associated with purchasing or redeeming the payment stablecoins.” In addition, “fees can only be changed upon not less than 7 days’ prior notice to consumers.”

The FDIC’s proposed redemption rule basically tracks the Act, but it adds that the disclosures must be “in plain language and in a format that is readily noticeable, readily understandable, and segregated from other information.”[3]

In addition, the FDIC makes two changes. One, it clarifies that the seven days prior notice means seven “calendar days.” Unlike “business days,” the meaning of calendar days is clear.

Two, it adds the phrase “unless the change is a decrease in fees.” Apparently, the issuer would not be required to notify the consumer if it is lowering its fees.

The FDIC’s Final Rule should delete the phrase “unless the change is a decrease in fees.” Consumers need to know the actual cost of their payment stablecoins. That is the only way they can accurately compare prices among payment stablecoins and the cost of using a debit or credit card instead of a payment stablecoin.

In its Final Rule, the FDIC also should require issuers to itemize and describe each fee that it charges. This is fully consistent with the requirement in the proposed regulations that disclosures be made clearly and be “readily understandable.” It is particularly important because the Act imposes no limit on fees.

The timing of disclosures is crucial. Prior to the time consumers purchase payment stablecoins, issuers should be required to inform consumers that the issuer can raise its prices on seven calendar days’ notice and how the consumer will be informed of that change.

Knowledge of the amount of fees is important information because consumers may have to redeem their payment stablecoins for a variety of reasons. They may need to pay a merchant who does not accept payment in stablecoins. Due to fragmentation in the market consumers may need to redeem one issuer’s stablecoins because they want to buy goods from a seller who only accepts payment stablecoins sold by another issuer.[4]

It is notable that the proposed regulations require that important information be segregated and acknowledge the importance of the “format” in which the disclosures are made. Since the disclosures are made online, web design features such as format are crucial.[5]

However, the Final Rule should include more detail in order to accomplish the regulation’s stated goal that the format be “readily noticeable to customers … [and] readily understandable by customers.”

For example, the Act requires establishment of “conspicuous” procedures and a “conspicuous” disclosure of all fees. However, there is no definition of “conspicuous” in the Act or the FDIC’s proposed regulations. The FDIC should provide a definition that takes into account disclosures that are made on the issuer’s website.[6]

The Act requires a “clear and conspicuous” procedure. FDIC should prohibit issuers from engaging in conduct that undermines that mandate by making it difficult for consumers to redeem their payment stablecoins. For example, the following conduct should be prohibited: Requiring the consumer to take several steps before redeeming their payment stablecoins. Requiring consumers to provide copious amounts of information when making a redemption request, far beyond what is necessary to process the request. Requiring consumers to click through a long chain of links, each link marketing different products, in order to reach the website page enabling consumers to effectuate their redemption request.[7]  Requiring consumers to scroll all the way down to the bottom of a page in order to find an important disclosure.[8]

Disclosures should be required prior to consumers’ purchases

The timing of fee disclosures is important. It would seriously undermine the Act’s most important protections unless issuers are required to provide disclosures at a meaningful time prior to when consumers are committed to purchase payment stablecoins.[9]

In order to facilitate compliance with consumer statutes, regulators have published Model Forms.[10] Doing so for issuers of payment stablecoins would be useful for issuers; they could avoid the burden of having to draft their own forms. If they use the regulators’ forms, they could be confident they comply with the law. Consumers also would benefit. If many issuers use those model forms, consumers could more easily compare terms and fees. That would enable them to make more informed decisions on which issuer, if any, to choose for their payment stablecoin purchases.

The FDIC should make it clear that federal consumer protection laws apply

Despite the Act’s failure to provide consumers with a private right of action, they nevertheless have important tools if other federal laws apply to payment stablecoin transactions. One major law is the Electronic Fund Transfer Act (EFTA). Another law that protects consumers is the Consumer Financial Protection Act’s prohibition of unfair, deceptive and abusive acts and practices.[11] Consumers also would benefit if the Consumer Financial Protection Bureau has enforcement authority over payment stablecoin transactions.

Section 6(c) of the Act includes the following:   “RULE OF CONSTRUCTION — Nothing in this Act may be construed to modify or otherwise affect any right or remedy under any Federal consumer financial law, including 12 U.S.C. 5515 and 15 U.S.C. 41 et seq.” On its face, that section would seem to allow consumers to take advantage of the EFTA and the Consumer Financial Protection Act.

However, bank trade associations contend that the Act is not crystal-clear on the applicability of federal consumer protection laws. In its letter to the Treasury Department, the bank trade associations note that the Act “does not address the application of the EFTA…to payment stablecoin transfers. The resulting uncertainty poses risk of confusion for consumers, financial institutions and courts.”[12] The associations note that if “federal policymakers” do not take action, the issue will be decided by court cases. Unless the courts agree with each other in all respects, uncertainty and confusion will result.

Consumers need the protection provided in these other laws. This is especially important for low-income consumers. It is expected that issuers will target them in their marketing. They may be an attractive segment to issuers since many low-income consumers cannot qualify for credit cards and cannot afford checking accounts with their high fees for low-balance customers and high overdraft fees.

The FDIC’s Final Rule should ensure there is no confusion by clearly stating that the EFTA and the Consumer Financial Protection Act apply to the GENIUS Act and regulations. Furthermore, the Final Rule should clearly state that the Consumer Financial Protection Bureau has authority to enforce the CFP Act in regard to transactions involving payment stablecoins.

The FDIC should make it clear that state consumer protection laws are not preempted

Section 7(f)(4) of the GENIUS Act provides that “nothing in this chapter shall preempt state consumer protection laws, including common law, and the remedies available thereunder.”

In contrast to federal and state laws governing credit and debit cards, the Act provides consumers almost no protection and no private right of action. Furthermore, as explained above, low-income consumers may be targeted by issuers. They especially need the protection of state laws. Consequently, it is crucial that consumers have the benefit of those laws. To foreclose any doubt or confusion, the FDIC’s Final Rule should clearly state that state consumer laws, including laws protecting consumer privacy, are not preempted by the Act.

The FDIC should require clear and prominent disclosures that there is no insurance and that consumers may lose all of their funds

It is likely consumers will assume that FDIC or comparable insurance protects their payment stablecoins. This is a reasonable assumption since in many instances consumers will use the FDIC-insured money in their bank accounts to purchase payment stablecoins. In fact, they may purchase their payment stablecoins from an affiliate of their bank or a fintech that closely resembles the services of the bank from which they withdrew the funds to purchase payment stablecoins.

The Act prohibits issuers from marketing payment stablecoins in such a way “that a reasonable person would perceive the payment to be…guaranteed or approved by the Government of the United States.”[13] In addition,iIn its proposal, the FDIC states that there is no pass-through insurance guaranteeing payment stablecoins.[14]

The FDIC Final Rule should require issuers to provide consumers with a clear and prominent disclosure that payment stablecoins are not guaranteed by any government agencies. A disclosure also should warn consumers that if the issuer has major financial difficulties, they may not be able to redeem their payment stablecoins and may lose all of the money they used to purchase their stablecoins from that issuer.[15] The disclosure should be provided to consumers before they become obligated to purchase payment stablecoins. The FDIC should require that disclosure in all agreements with consumers and prominently on the issuer’s website.

The FDIC should protect consumer privacy

The FDIC’s Final Rule should add a provision requiring issuers to protect consumers’ privacy. For example, issuers should be prohibited from using their customer information for marketing purposes. This prohibition also should apply to affiliates of issuers. Issuers should be prohibited from sharing their customer information with third parties.

Adding consumer privacy safeguards to the Final Rule is consistent with the security requirements in the proposed rule. Those requirements include issuers monitoring and adjusting their technology and security programs in light of “the sensitivity of its customer information, [and] internal and external threats.” Issuers are required to have a program to notify their customers if they become “aware of an incident of unauthorized access to sensitive customer information.”[16] Obviously, one of the objectives of these requirements is to protect customer privacy.[17]

The FDIC should incorporate the OCC’s proposed security and privacy provisions. They include ensuring the confidentiality of personal customer information, protecting against the unauthorized access or use of records containing personal information that could substantially harm or inconvenience customers, and ensuring the proper disposal of such records.[18]

Because several states have strong consumer privacy laws, it is important for the FDIC’s Final Rule to make it clear that state laws protecting consumer privacy are not preempted.

Finally, non-banks in bankruptcy proceedings should be prohibited from selling customer information to third parties. Otherwise, any steps the issuer has taken to protect the privacy of that information can be completely undermined. This is consistent with the Act’s amendments to the Bankruptcy Code granting holders of payment stablecoins a more favored position compared to most other unsecured creditors.

The FDIC should prohibit issuers from providing credit to purchase payment stablecoins

The FDIC’s proposed regulations prohibit issuers from providing credit to customers that they could use to purchase payment stablecoins. The FDIC justifies the prohibition by explaining that the Act requires issuers to maintain “a narrow set of highly liquid assets” and “engage in a narrow set of activities” in order to ensure that issuers can satisfy redemption requests.

There is another justification for the prohibition. Congress’ sole purpose was to provide a legal framework for issuers and consumers who want to use stablecoins to pay for goods and services. Nothing in the Act suggests it intended to enable issuers to provide an alternative to traditional credit.

The FDIC should consider the context in which consumers will purchase payment stablecoins. The typical consumer will have a great deal of trouble understanding the world of payment stablecoins. Consumers who try to inform themselves will confront a plethora of obscure terms whose meaning are opaque, such as: crypto, digital assets, digital tokens, private money, white label issuers, etc. Companies are now offering agentic agents that can make stablecoin-based purchases. To add to the confusion, payment stablecoins reportedly will be sold by big-box retailers, online fintechs, credit card companies, and the consumer’s own traditional bank or credit union.

Further complicating matters, it is not clear what law applies to transactions in which issuers provide credit. For example, would the Truth In Lending Act apply? Would that statute and Regulation Z need to be amended? If the Truth In Lending Act does not apply, what, if any, legal safeguards would apply to protect consumers? These are legal issues of critical importance to issuers and consumers.

Prohibiting issuers from offering credit avoids all of these concerns and is sound policy.

Conclusion

The GENIUS Act does not adequately protect consumers. However, the recommendations in this letter would significantly benefit them.

Respectfully submitted,

Mark E. Budnitz
Bobby Lee Cook Professor of Law Emeritus
Georgia State University College of Law, Atlanta, Georgia

[1]  Jessica Gibson, Living Paycheck to Paycheck? You’re Not Alone-67% of People Are in 2025, INVESTOPEDIA, Sept. 24, 2025 (reporting that a PNC Bank study found that 67% of Americans are living paycheck to paycheck); J.R. Duren, Nearly half of consumers are living paycheck to paycheck and fear they couldn’t handle $1K surprise expense, survey finds, YAHOO FINANCE, April 20, 2026 (reporting on survey that some 40 percent of consumers were living paycheck to paycheck out of necessity in December 2025 and unexpected expenses keep recurring).

[2]  GENIUS Act Requirements and Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers and Insured Depository Institutions, § 350.5(b)(1), 91 Fed. Reg. 18534, 18573, April 10, 2026 (hereafter FDIC Regs).

[3]  Id., at § 350.5(d)(1). The OCC’s proposed regulations also include the segregation requirement. The OCC explained that the requirement that these disclosures be segregated is needed to ensure that other information the issuer provides does not “obscure the importance of these disclosures.”  Implementing the Guiding and Establishing National Innovation for U.S. Stablecoins Act for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency, 91 Federal Register 10202, 10221, March 2, 2026 (hereafter OCC Regs).

[4]  The fragmentation of the payment stablecoin marketplace is described in Kirill Gertman, A fragmented landscape of bespoke stablecoins will serve nobody, American Banker, Jan. 5, 2026.

[5]  See for example, Tejon v. Zeus Networks, _ F. 4^th _, 2026 WL 1194722 (11^th Cir., May 1, 2026)(in a case where a website hyperlink led to a browsewrap agreement, the court applied Florida case law and found, inter alia, that the hyperlink was not sufficiently conspicuous to put consumers on notice of an arbitration agreement’s terms; in reaching that conclusion, the court evaluated the website’s general design, the hyperlink’s proximity to buttons consumers had to click on, and the format and color of the links).

[6]  Proposed § 350.5(d)(4) provides that the issuer must include disclosures in “any agreements” that the issuer provides. The Federal Trade Commission has published a document to assist advertisers make clear and conspicuous online disclosures that comply with the Federal Trade Commission Act and the FTC’s regulations. That document provides guidance that can be easily adapted to payment stablecoin regulations. See dotcomDisclosures, How to Make Effective Disclosures in Digital Advertising, FEDERAL TRADE COMMISSION, March 2013. www.ftc.gov. The sponsors of the Uniform Commercial Code have published amendments to accommodate emerging technologies. Pursuant to that objective, they amended the definition of “conspicuous” and in a Comment discussed factors that are relevant to whether a term in an online agreement is conspicuous. UNIFORM COMMERCIAL CODE AMENDMENTS (2022), Official Comment to § 1-201(b)(10), at 10-11. www.uniformlaws.org.

[7]  “Disclosures that are an integral part of a claim or inseparable from it should not be communicated through a hyperlink.” dotcomDisclosures, id. at 10.

[8]  “Requiring consumers to scroll in order to view a disclosure may be problematic…because consumers who don’t scroll enough (and in the right direction) may miss important qualifying information and be misled.” Id. at 8-9.

[9]  The Truth In Lending Act requires a credit card issuer to make important disclosures before the opening of an account. 15 U.S.C. § 1637(a). Regulations issued pursuant to the Electronic Fund Transfer Act require financial institutions to make initial disclosures “at the time a consumer contracts for an electronic fund transfer or before the first electronic fund transfer is made….” 12 C.F.R. § 1005.7.

[10]  See for example, Truth In Lending Act, Reg. Z, Appendix G, Open-End Model Forms and Clauses, 12 C.F.R. pt. 1026; Fair Credit Reporting Act, Appendix C, FCRA Model Forms, 12 C.F.R. § 1022.1.

[11]  12 U.S.C. § 5531(a).

[12]  American Bankers Assoc., Consumer Bankers Assoc., Financial Services Forum, Bank Policy Institute, and The Clearinghouse, GENIUS Act Implementation, Letter to the U.S. Department of the Treasury, Nov. 4, 2025. Georgetown Law School Professor Arthur Wilmarth argues that “a purchase or redemption of a stablecoin by a ‘consumer’ should be treated as a ‘consumer financial product or service’ subject to the CFP Act [Consumer Financial Protection Act] as well as the CFPB’s [Consumer Financial Protection Bureau’s] administrative responsibilities under the CFP Act.”  Arthur E. Wilmarth, The Looming Threat of Uninsured Nonbank Stablecoins, 50 Delaware Journal of Corporate Law 3, at 117 (2025).

[13]  GENIUS Act, § 4(a)(9)(A(ii)(III). See § 4(e)(1) and (2), providing that payment stablecoins shall not be guaranteed by the FDIC or NCUA and it is unlawful to represent that they are guaranteed by those agencies.

[14]  FDIC Regs, at 18559.

[15]  Adam Levitin, Sorry to Break It to You Geniuses: Under the GENIUS Act the Holders of Stablecoins Actually

Have FIFTH Priority in an Issuer Bankruptcy, CREDIT SLIPS, Dec. 2, 2025. https://creditslips.org.

[16]  FDIC Regs, § 350(b)(4) & (5).

[17]  The OCC uses the term “data privacy” in a question about the security provisions of its proposed rule. OCC Regs, at 10260.

[18]  OCC Regs, § 15.13(b)(4).