July 16, 2026
Melane Conyers-Ausbrooks
Secretary of the Board
National Credit Union Administration
Re: NCUA-2026-1024
Dear Ms Conyers-Ausbrooks:
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 NCUA 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 NCUA 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 NCUA should adopt regulations that take advantage of these avenues to protect consumers.
Specifically, the NCUA’s Final Rule should require an error resolution procedure and adopt the “two business day” redemption requirement. But the NCUA should strengthen it by defining “business day.” The Final Rule also should add necessary redemption disclosures and limit fees. 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 NCUA should work with other regulators to ensure the maximum possible consistency in their final rules
The NCUA should seek to make its final rules consistent with those of the other regulatory agencies to the extent applicable. 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 NCUA’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.[1] 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 that 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.[2]
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 NCUA Final Rule should mandate an error resolution procedure
Question 193 of the NCUA’s proposed regulation asks:
Should the NCUA establish minimum standards for customer service and dispute resolution for retail holders of Payment Stablecoins, including requirements for response timelines and escalation procedures?
Congress enacted the GENIUS Act in order to establish a legal framework for the sale and use of payment stablecoins. In doing so Congress gave a legal imprimatur to the payment stablecoin industry. It would not have done so if it did not intend to encourage consumers to take advantage of this new payment system. Not only is a rule requiring an error resolution procedure consistent with legislative intent, it is essential to the success of the enterprise.
Consumers will experience serious problems when using payment stablecoins, as they do with any other payment device and system. Issuers and third parties participating in payment stablecoin transactions will make mistakes. Their technology and that of other companies facilitating transactions will suffer outages, breakdowns and cyberattacks. The NCUA itself acknowledges that there is the probability of fraud.[3] Unauthorized use is just one aspect of fraud that frequently occurs when consumers have used debit and credit cards. It will inevitably harm users of payment stablecoins as well. The NCUA notes that consumers are unfamiliar with payment stablecoins.[4]
Features of payment stablecoin transactions will confuse these consumers. For example, “white label” marketing will likely confuse consumers who will not understand who the issuer is and the role of other companies that are involved in payment stablecoin transactions.[5]
Because of these characteristics of payment stablecoin transactions, consumers need an error resolution procedure when they encounter questions and problems. Without it they will not use payment stablecoins because they will not have any way to obtain relief when they suffer harm since under the Act there is no private right of action. Word can spread quickly on the internet when consumers voice their bad payment stablecoin experiences. If consumers have no process for getting errors and other problems corrected, consumers will not have any trust and confidence in payment stablecoins systems and will not use them.[6]
Most consumers can use credit and debit cards instead of payment stablecoins. Federal laws guarantee a strong error resolution procedure that protects consumers using those cards. Consumers are familiar with their error resolution rights since the laws require frequent disclosure of the required procedure and many have used them. They will expect those rights when they encounter problems with payment stablecoins. Financial institutions have adjusted well to implementing those procedures. I am aware of no empirical evidence that payment stablecoin companies cannot do the same. The Federal law on credit and debit card error resolution procedures provides the NCUA and other regulators with a time-tested model for writing procedures for payment stablecoin companies to comply with.
The NCUA’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, mortgage and car payments.[7] Consequently, it is essential that the NCUA’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. Furthermore, it can result in hardship for consumers since some issuers may take advantage of the Act’s vague requirement to delay redemption and thereby harm consumers.
The NCUA’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.” The Office of the Comptroller of the Currency and the FDIC also proposed rules that 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 95 of its proposal, the NCUA asks whether it has appropriately defined “timely” as not exceeding two business days
If not, what may be a more appropriate time frame? For example, should the NCUA consider other time frames ranging from one calendar day to seven calendar days timely? Should the NCUA consider some timeframe longer than seven calendar days timely? Should the NCUA define “timely” in a manner that scales with the liquidity of the underlying Reserve Assets or other factors? How should any definition of “timely” appropriately balance considerations of price stability and run risk?
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 NCUA’s Final Rule should define “business days”
The NCUA’S proposed rule requires redemption within two business days after the consumer requests redemption. This is a welcome and necessary clarification of the Act’s mandate that redemption be timely.
However, it is unfortunate that the NCUA, like the FDIC and 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 Final Rule 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 its proposed rules for extending the two day period and changing the fees charged by issuers, the NCUA defines the extension as seven calendar days. The definition of the two day period should be just as precise.
In addition, the NCUA should require issuers to disclose to consumers prior to purchase and thereafter that under certain circumstances, the NCUA may extend the redemption time well beyond two business days.
When the two business day period is in fact extended, issuers should be required to prominently disclose that to both current consumers and those who apply to purchase payment stablecoins.
In drafting its Final Rule, the NCUA should keep in mind the interrelationship among the Act’s failure to limit fees, the requirement that the issuer notify consumers seven days before a fee increase takes effect, and the possibility that the NCUA 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 NCUA 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.
Consideration of these factors should result in a clear definition of business days that is easy for consumers to understand and gives them a reasonable amount of time to exercise their right to redeem.
The Final Rule also should permit a consumer extra time to request redemption if there is a technical malfunction such as a lengthy power outage or a natural disaster where the consumer resides.[8]
The NCUA should improve its disclosure requirements
In Question 102 of the proposed rule, the NCUA asks whether there are
any steps the NCUA should take to ensure that potential Customers are not confused or overwhelmed by these disclosures, especially in light of the relative unfamiliarity many potential Customers may have with Payment Stablecoins? For example, should the NCUA take any steps to unify required disclosures so that they are all provided to Customers at a specific point during the relationship?
The Act requires issuers to “publicly, clearly, and conspicuously disclose [certain mandated information] in plain language.” This statutory language is too general to provide issuers with the clarity and guidance they need to comply with the Act. It is also too general to ensure consumers receive the disclosures they need to make informed decisions about whether to purchase payment stablecoins.
In response to Question 102, there are steps the NCUA definitely should take, and many are suggested in its proposal and accompanying cogent discussion.
For example, Proposed § 706.203(d)(1) provides that an issuer must make disclosures that are “readily noticeable to Customers, readily understandable by Customers, and segregated from other information.” As the NCUA explains, this provides “more certainty on what it means to “publicly, clearly, and conspicuously disclose [the information] in plain language.”
Furthermore, “The NCUA is proposing to include the requirement that the disclosures be segregated from other information to ensure that the information in the disclosures is not combined with other non-relevant information that could obscure the importance of these disclosures.”
Crucially, the NCUA takes into account the context in which payment stablecoin transactions occur. “The NCUA believes that these disclosures are necessary to prevent confusion and ensure that Payment Stablecoin holders understand who has the ultimate obligation to redeem their Payment Stablecoin.”
Consumers will be confused and often they will not understand which party in the transaction is the issuer. This is significant because the issuer is the only party which is required to redeem the consumers’ payment stablecoins. Consumers will be confused because of the way many of these transactions are structured and marketed.
For example, as the NCUA points out, some issuers issue “more than one brand of Payment Stablecoin either directly or through affiliates.” Some transactions involve third parties. Consumers will be hard pressed to determine who the issuer is where the payment stablecoins are “white labeled” in which a sponsor brands and markets a payment stablecoin issued by a third-party issuer.[9] The distinction between banks and non-banks have become blurred as stablecoin issuers are approved to operate as national trust banks. Consumers are unlikely to understand the different roles and responsibilities of the sponsor and those of the issuer.
In Question 195 the NCUA asks whether it should “standardize the disclosures that NCUA-Licensed PPSIs are required to provide to Customers similar to how the Truth in Savings Act standardizes disclosures for share accounts, so that Customers can easily compare Payment Stablecoin products, redemption terms, and fee structures across issuers?”
The NCUA should standardize disclosures. As the NCUA itself acknowledges, consumers will be confused by how payment stablecoin systems work, who the issuer is, and what consumers’ rights are.
In addition to the Truth in Savings Act, regulators of other consumer statutes have promoted standardization and facilitated compliance by publishing 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 NCUA’s Notice of a change in fees
The Act requires issuers to “publicly, clearly, and conspicuously disclose in
plain language all fees associated with purchasing or redeeming the payment stablecoins, provided that such fees can only be changed upon not less than 7 days’ prior notice to consumers.”
The NCUA’s proposed rule clarifies that the seven days prior notice means seven “calendar days.” This is a welcome addition. Unlike “business days,” the meaning of calendar days is clear.
Question 100 asks whether the proposed rule is correct in requiring issuers to deliver notice to current customers “whenever they change fees.” The question then clarifies what it means by “whenever” by asking whether the notice should be waived if the change is a decrease in fees.
Issuers should be required to notify consumers of a decrease in fees. The Act requires notice of “all fees.” In addition, consumers need full disclosure, even if it is a decrease in fees. Consumers need to know the actual total 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 payment stablecoins.
The NCUA should adopt Proposed § 706.203 (d)(1)(iv) and (d)(2) that require issuers to update the disclosure of “All fees associated with purchasing or redeeming Payment Stablecoins,” “if there are any changes” in those fees.
Question 100 also asks: “Are there any specific methods or modes of communication that the NCUA should require? If so, which modes of communication would be most effective and appropriate?”
Issuers should be required to use every mode of communication that the issuer has available to it. If the issuer has the consumer’s email address, it should be required to send an email with the required information. If the issuer has the consumer’s cell phone number, it should be required to call or send a text message to the consumer. That is what financial institutions do now when they want to sell goods and services to consumers, so apparently there are no technical obstacles to doing so.
It should never be sufficient for the issuer to merely post a communication on its website. The NCUA should decide what modes of communication to require by taking into consideration that, as the NCUA acknowledges, consumers are unfamiliar with payment stablecoins and how the system operates. In addition, communications such as an increase in fees may have a serious impact on those consumers who live paycheck to paycheck. Therefore, the NCUA should require issuers to do their utmost to inform consumers.
In its Final Rule, the NCUA 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.[11]
The NCUA should limit fees
In Question 99, the NCUA asks: “Are there limitations that the NCUA should impose on redemption fees, e.g., to discourage run risk or to encourage price stability?”
The only major consumer right in the Act is the right to redeem. If issuers can impose unreasonably high redemption fees, they may be able to make it impossible for many consumers to exercise that right.
There are many legitimate reasons why consumers may need to redeem some or all of their payment stablecoins. For example, because of the fragmentation of the market a consumer may need to redeem payment stablecoins purchased from Issuer A in order to buy payment stablecoins from Issuer B.
Circumstances may arise that alert consumers to the fact that payment stablecoins are inherently risky purchases. Because there is no insurance, consumers are likely to try to redeem their payment stablecoins if there is any indication their issuer or its affiliates or third parties involved in their payment stablecoin transactions may be in financial trouble. Even news of the financial troubles of other issuers may trigger a run, especially since that type of news may go viral in a very short time.
Consumers will be especially anxious if they learn they may not recover their funds if the issuer files for bankruptcy.[12]
It was Congress’ objective in passing the Act to encourage a successful new payment system. If issuers are permitted to deny consumers their one vital right by charging unreasonably high fees that they cannot afford to pay, consumers will lose their trust and confidence in that system and avoid using it. After all, most have the alternatives of credit and debit cards where they have far more substantial rights under federal law.
In addition, to prevent unfair practices and promote consumer trust and confidence, the Final Rule should impose limits on other fees. Financial institutions are notorious for imposing all sorts of surprising “junk fees.”[13] For instance, financial institutions impose excessive overdraft fees, NSF fees, “administrative fees,” and “service fees.” Issuers may charge a fee when a consumer requests a statement of account or requests an explanation of a processing delay.
The Final Rule should include Proposed § 706.202(g)(3) that provides that if an issuer is required to begin liquidation and redeem outstanding payment stablecoins, it may not charge customers a fee to redeem their payment stablecoins at any time during the liquidation. It is bad enough that consumers may not be able to get all of their money back, through no fault of their own. To charge them fees for a return of at least some of what is theirs adds further injury to the harm that the issuer’s liquidation may cause consumers.
The NCUA Final Rule should adopt the segregation and format standards in the Proposed Rule, define “conspicuous,” and prohibit web designs that impede redemption
The Act requires issuers to publicly disclose their redemption policy. In doing so, they must “establish clear and conspicuous procedures for timely redemption of outstanding payment stablecoins.” In addition, they are required to “publicly, clearly, and conspicuously disclose in plain language all fees associated with purchasing or redeeming the payment stablecoins.”
The proposed rules require issuers to “publicly, clearly, and conspicuously disclose [certain information] in plain language and in format that is readily noticeable to Customers, [and] readily understandable by Customers.” In addition, the “NCUA is proposing to include the requirement that the disclosures be segregated from other information to ensure that the information in the disclosures is not combined with other non-relevant information that could obscure the importance of these disclosures.”
As the NCUA points out, these requirements are “consistent” with the Act. Furthermore, as the NCUA notes, they “are particularly important in the situation where an NCUA-Licensed PPSI issues more than one brand of Payment Stablecoin either directly or through an Affiliate.”
Failure to include these requirements would seriously undermine the Act’s disclosure standards. Without the proposed elaboration of the Act’s vague standards, some issuers may take advantage and make disclosures that are not “readily noticeable” and “understandable.” As the NCUA explains, its proposal “provide[s] more certainty on what it means to ‘publicly, clearly, and conspicuously disclose [the information] in plain language.’” Moreover, as the NCUA says, its proposals “are necessary to prevent [consumer] confusion.”
The proposal’s requirements are necessary given the special challenges consumers face when disclosures are made on cell phones and websites.
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.[14]
However, the Final Rule should include more detail in order to accomplish the proposed 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 NCUA’s proposed regulations. The NCUA should provide a definition that takes into account disclosures that are made on the issuer’s website.[15]
The Act requires a “clear and conspicuous” procedure. The NCUA 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.[16] Requiring consumers to scroll all the way down to the bottom of a page in order to find an important disclosure.[17]
Disclosures should be required prior to consumers’ purchases
In Question 102 the NCUA asks whether it should “take any steps to unify required disclosures so that they are all provided to Customers at a specific point during the relationship?”
Required disclosures should be unified and provided to consumers before consumers are committed to purchase payment stablecoins.[18] Not requiring disclosures until some later time would seriously undermine the Act’s most important protections. In addition, issuers should be required to provide consumers with periodic disclosures as is required by other federal consumer statutes.[19]
As discussed above, the NCUA could facilitate the unification of disclosures by publishing Model disclosures as provided for in other consumer laws.
The NCUA 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.[20] 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.”[21] 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 NCUA’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 NCUA should be cautious if it decides to specify how the FTC Act could apply
In its proposal, the NCUA asks: “Should the NCUA specify how section 5 of the FTC Act relating to unfair or deceptive acts or practices could apply to how the NCUA evaluates the disclosures?”
Specifying how section 5 applies would provide issuers with guidance on what acts and practices the NCUA would regard as unfair and deceptive.
However, the history of section 5 violations clearly shows that what constitutes unfair and deceptive acts or practices evolve over time. This evolution is essential as entirely new systems enter the marketplace, such as payment stablecoins. New types of businesses, such as fintechs, market their products and services.[22] Companies use innovative tools to entice consumers, such as artificial intelligence. There are always some companies that test the limits of what may be legal.
Consequently, if the NCUA decides to specify how section 5 could apply, it should make it unmistakably clear that its descriptions of unlawful conduct are not the only ones that may violate section 5. They are merely illustrative. The NCUA should state that the conduct they describe includes, but is not limited to the ones they specify. Other conduct also may be unlawful.
The NCUA 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 NCUA’s Final Rule should clearly state that state consumer laws, including laws protecting consumer privacy, are not preempted by the Act.
The NCUA Final Rule should include AI and automated decision making guardrails
Question 196 of its proposed regulation asks:
Should the NCUA establish any guardrails on the use of artificial intelligence or automated-decision making systems by NCUA-Licensed PPSIs in the context of risk management, redemption processing, or reserve asset management?
Question 196 also asks what the NCUA regulations should do to address potential fraud.
The Final Rule should definitely include guardrails on the use of AI or automated-decision making systems. The GENIUS Act specifically requires issuers to comply with its risk management requirements that include “information technology risk management principles-based requirements and standards.”[23]
AI poses one of the greatest risks to payment stablecoin systems, whether it is agentic AI, embedded AI, or whatever new form of AI is developed in the future. Fraud is one of the most serious threats that AI poses.[24] Including AI guardrails in the Final Rule is vital to help prevent fraud.
The NCUA 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 insurance, NCUSIF insurance or comparable insurance protects their payment stablecoins. This is a reasonable assumption since in many instances consumers will use the FDIC NCUSIF-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.”[25]
The NCUA’s 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 consumers may lose all of the money they used to purchase their stablecoins from that issuer.[26] The disclosure should be provided to consumers before they become obligated to purchase payment stablecoins. The NCUA should require that disclosure in all agreements with consumers and prominently on the issuer’s website.
The NCUA should protect consumer privacy
The NCUA’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.”[27] 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.”[28] Obviously, one of the objectives of these requirements is to protect customer privacy.[29]
The NCUA 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.[30]
Because several states have strong consumer privacy laws, it is important for the NCUA’s Final Rule to make it clear that state laws protecting consumer privacy are not preempted even if the issuer is in bankruptcy proceedings.
If the NCUA fails to do this, NCUA rules to protect privacy can be completely undermined. When an issuer is in bankruptcy, under certain circumstances the sale or lease of personally-identifiable consumer information can be sold to the highest bidder.[31] Several states have privacy laws that may prevent that information from being sold or leased. The Final Rule should ensure that the Bankruptcy Court applies state privacy law.
Applying state privacy law is consistent with the Act. In that federal legislation, Congress amended the Bankruptcy Code to assist consumers holding payment stablecoins when an issuer is in bankruptcy. It did this by granting consumers a more favored position than most other unsecured creditors. A Final Rule protecting consumer privacy when the issuer is in bankruptcy furthers that objective.
The NCUA should prohibit issuers from providing credit to purchase payment stablecoins
The NCUA should adopt the FDIC’s proposed regulation that prohibits 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 NCUA 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 Act does include some consumer protection and the NCUA should issue a Final Rule that ensures consumers will have the benefit of that protection as recommended in this letter.
Respectfully submitted,
Mark E. Budnitz
Bobby Lee Cook Professor of Law Emeritus
Georgia State University College of Law, Atlanta, Georgia
[1] The definition of “customer” is not the same in the regulations of the NCUA, the OCC, and the FDIC. As the American Bankers Association noted in its comment on the FDIC’s proposal, “divergent definitions will produce inconsistent consumer protection outcomes depending solely on which agency supervises the issuer, an outcome that is neither consistent with the GENIUS Act’s framework, helpful for consumers, nor justifiable on policy grounds.” Aislinn Keely, FDIC Urged to Align Stablecoin Rules With Other Regulators, LAW360, June 11, 2026.
[2] National Credit Union Administration, Implementing the GENIUS Act, 91 Fed. Reg. 28956, 28985 (May 18, 2026)(hereafter NCUA Regs).
[3] Id. at 29009. “[W]e could very well be one major fraudulent transaction away from eroding the consumer trust and confidence which form the bedrock of our financial system.” Prathamesh Khedekar, Banks need to leverage big data to combat a surge in AI-enabled fraud,
AMERICAN BANKER, March 25, 2024.
[4] 91 Fed. Reg. 28956, at 28986.
[5] Am. 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, at 8.
[6] Commenting on the “trust and confidence placed by depositors in financial institutions,” the Comptroller of the Currency noted that “banks survive primarily on public trust….” Comptroller of the Currency, Disposition of Credit Life Insurance Income, 41 Fed. Reg. 29846, 29847 (1976).
[7] 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).
[8] See the Electronic Fund Transfer Act that provides a financial institution is not liable if its failure to comply with the EFTA is due to “Acts of God and technical malfunctions.” 15 U.S.C. § 1693h(b).
[9] Bank Trade organizations have described white labeled payment stablecoins and the substantial role the sponsor may have. 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, at 8. “The sponsor may also retain the right to make key decisions about the relevant payment stablecoin, including regarding pricing, target ‘use cases,’ customer relationships and liquidity and redemption policies. These arrangements can blur the line between the issuer and the sponsor, especially as the sponsor may obtain significant economic benefits, including payments from the issuer, tied to uptake and use of the relevant payment stablecoin.”
[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] 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.
[12] 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.
[13] Consumer Financial Protection Bureau, “Junk Fees,” www.consumerfinance.gov//rules-policy/junk-fees/.
[14] See for example, Tejon v. Zeus Networks, 174 F. 4th 1322 (11th 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).
[15] 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.
[16] “Disclosures that are an integral part of a claim or inseparable from it should not be communicated through a hyperlink.” dotcomDisclosures, id. at 10.
[17] “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.
[18] 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.
[19] Gramm-Leach-Blilely, 15 U.S.C. § 6803; Truth In Lending, 15 U.S.C. 1637(b); Electronic Fund Transfers, Reg. E, 12 C.F.R. § 1005.9.
[20] 12 U.S.C. § 5531(a).
[21] 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).
[22] In addition to fintechs, major banks, Visa and Mastercard are planning to enter the stablecoin market. John Adams, PayPal boosts its stablecoin as banks prepare to launch a share one, AMERICAN BANKER, July 9, 2026.
[23] GENIUS Act, § 4(a)(4)(A)(iv).
[24] “AI fraud has arrived, and our defenses are not yet ready. What makes this moment different is not just the sophistication of attacks but their scale. Generative AI can churn out thousands of convincing scams in seconds….” Shlomit Wagman, AI-enabled fraud is a problem right now, and we are not ready, ThinkBank, Nov. 4, 2025, www.thinkbank.com.
[25] 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.
[26] 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.
[27] NCUA Regs at 28988.
[28] Id.
[29] The OCC uses the term “data privacy” in a question about the security provisions of its proposed rule. Implementing the [GENIUS Act] for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency, 91 Fed. Reg. 10202, at 10260 (hereafter OCC Regs).
[30] OCC Regs, § 15.13(b)(4).
[31] The Bankruptcy Code provides limited consumer protection when the debtor seeks to sell or lease “personally identifiable information about individuals.” 15 U.S.C. § 363(b)(1). See also § 332. But that provision applies only if the debtor has a privacy policy and discloses that policy to the consumer. In addition, it has a “narrow definition” of personally identifiable information. Laura N. Coordes, Unmasking The Consumer Privacy Ombudsman, 82 MONTANA LAW REVIEW 17, 25 (2021).
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 National Credit Union Administration
July 16, 2026
Melane Conyers-Ausbrooks
Secretary of the Board
National Credit Union Administration
Re: NCUA-2026-1024
Dear Ms Conyers-Ausbrooks:
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 NCUA 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 NCUA 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 NCUA should adopt regulations that take advantage of these avenues to protect consumers.
Specifically, the NCUA’s Final Rule should require an error resolution procedure and adopt the “two business day” redemption requirement. But the NCUA should strengthen it by defining “business day.” The Final Rule also should add necessary redemption disclosures and limit fees. 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 NCUA should work with other regulators to ensure the maximum possible consistency in their final rules
The NCUA should seek to make its final rules consistent with those of the other regulatory agencies to the extent applicable. 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 NCUA’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.[1] 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 that 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.[2]
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 NCUA Final Rule should mandate an error resolution procedure
Question 193 of the NCUA’s proposed regulation asks:
Should the NCUA establish minimum standards for customer service and dispute resolution for retail holders of Payment Stablecoins, including requirements for response timelines and escalation procedures?
Congress enacted the GENIUS Act in order to establish a legal framework for the sale and use of payment stablecoins. In doing so Congress gave a legal imprimatur to the payment stablecoin industry. It would not have done so if it did not intend to encourage consumers to take advantage of this new payment system. Not only is a rule requiring an error resolution procedure consistent with legislative intent, it is essential to the success of the enterprise.
Consumers will experience serious problems when using payment stablecoins, as they do with any other payment device and system. Issuers and third parties participating in payment stablecoin transactions will make mistakes. Their technology and that of other companies facilitating transactions will suffer outages, breakdowns and cyberattacks. The NCUA itself acknowledges that there is the probability of fraud.[3] Unauthorized use is just one aspect of fraud that frequently occurs when consumers have used debit and credit cards. It will inevitably harm users of payment stablecoins as well. The NCUA notes that consumers are unfamiliar with payment stablecoins.[4]
Features of payment stablecoin transactions will confuse these consumers. For example, “white label” marketing will likely confuse consumers who will not understand who the issuer is and the role of other companies that are involved in payment stablecoin transactions.[5]
Because of these characteristics of payment stablecoin transactions, consumers need an error resolution procedure when they encounter questions and problems. Without it they will not use payment stablecoins because they will not have any way to obtain relief when they suffer harm since under the Act there is no private right of action. Word can spread quickly on the internet when consumers voice their bad payment stablecoin experiences. If consumers have no process for getting errors and other problems corrected, consumers will not have any trust and confidence in payment stablecoins systems and will not use them.[6]
Most consumers can use credit and debit cards instead of payment stablecoins. Federal laws guarantee a strong error resolution procedure that protects consumers using those cards. Consumers are familiar with their error resolution rights since the laws require frequent disclosure of the required procedure and many have used them. They will expect those rights when they encounter problems with payment stablecoins. Financial institutions have adjusted well to implementing those procedures. I am aware of no empirical evidence that payment stablecoin companies cannot do the same. The Federal law on credit and debit card error resolution procedures provides the NCUA and other regulators with a time-tested model for writing procedures for payment stablecoin companies to comply with.
The NCUA’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, mortgage and car payments.[7] Consequently, it is essential that the NCUA’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. Furthermore, it can result in hardship for consumers since some issuers may take advantage of the Act’s vague requirement to delay redemption and thereby harm consumers.
The NCUA’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.” The Office of the Comptroller of the Currency and the FDIC also proposed rules that 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 95 of its proposal, the NCUA asks whether it has appropriately defined “timely” as not exceeding two business days
If not, what may be a more appropriate time frame? For example, should the NCUA consider other time frames ranging from one calendar day to seven calendar days timely? Should the NCUA consider some timeframe longer than seven calendar days timely? Should the NCUA define “timely” in a manner that scales with the liquidity of the underlying Reserve Assets or other factors? How should any definition of “timely” appropriately balance considerations of price stability and run risk?
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 NCUA’s Final Rule should define “business days”
The NCUA’S proposed rule requires redemption within two business days after the consumer requests redemption. This is a welcome and necessary clarification of the Act’s mandate that redemption be timely.
However, it is unfortunate that the NCUA, like the FDIC and 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 Final Rule 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 its proposed rules for extending the two day period and changing the fees charged by issuers, the NCUA defines the extension as seven calendar days. The definition of the two day period should be just as precise.
In addition, the NCUA should require issuers to disclose to consumers prior to purchase and thereafter that under certain circumstances, the NCUA may extend the redemption time well beyond two business days.
When the two business day period is in fact extended, issuers should be required to prominently disclose that to both current consumers and those who apply to purchase payment stablecoins.
In drafting its Final Rule, the NCUA should keep in mind the interrelationship among the Act’s failure to limit fees, the requirement that the issuer notify consumers seven days before a fee increase takes effect, and the possibility that the NCUA 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 NCUA 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.
Consideration of these factors should result in a clear definition of business days that is easy for consumers to understand and gives them a reasonable amount of time to exercise their right to redeem.
The Final Rule also should permit a consumer extra time to request redemption if there is a technical malfunction such as a lengthy power outage or a natural disaster where the consumer resides.[8]
The NCUA should improve its disclosure requirements
In Question 102 of the proposed rule, the NCUA asks whether there are
any steps the NCUA should take to ensure that potential Customers are not confused or overwhelmed by these disclosures, especially in light of the relative unfamiliarity many potential Customers may have with Payment Stablecoins? For example, should the NCUA take any steps to unify required disclosures so that they are all provided to Customers at a specific point during the relationship?
The Act requires issuers to “publicly, clearly, and conspicuously disclose [certain mandated information] in plain language.” This statutory language is too general to provide issuers with the clarity and guidance they need to comply with the Act. It is also too general to ensure consumers receive the disclosures they need to make informed decisions about whether to purchase payment stablecoins.
In response to Question 102, there are steps the NCUA definitely should take, and many are suggested in its proposal and accompanying cogent discussion.
For example, Proposed § 706.203(d)(1) provides that an issuer must make disclosures that are “readily noticeable to Customers, readily understandable by Customers, and segregated from other information.” As the NCUA explains, this provides “more certainty on what it means to “publicly, clearly, and conspicuously disclose [the information] in plain language.”
Furthermore, “The NCUA is proposing to include the requirement that the disclosures be segregated from other information to ensure that the information in the disclosures is not combined with other non-relevant information that could obscure the importance of these disclosures.”
Crucially, the NCUA takes into account the context in which payment stablecoin transactions occur. “The NCUA believes that these disclosures are necessary to prevent confusion and ensure that Payment Stablecoin holders understand who has the ultimate obligation to redeem their Payment Stablecoin.”
Consumers will be confused and often they will not understand which party in the transaction is the issuer. This is significant because the issuer is the only party which is required to redeem the consumers’ payment stablecoins. Consumers will be confused because of the way many of these transactions are structured and marketed.
For example, as the NCUA points out, some issuers issue “more than one brand of Payment Stablecoin either directly or through affiliates.” Some transactions involve third parties. Consumers will be hard pressed to determine who the issuer is where the payment stablecoins are “white labeled” in which a sponsor brands and markets a payment stablecoin issued by a third-party issuer.[9] The distinction between banks and non-banks have become blurred as stablecoin issuers are approved to operate as national trust banks. Consumers are unlikely to understand the different roles and responsibilities of the sponsor and those of the issuer.
In Question 195 the NCUA asks whether it should “standardize the disclosures that NCUA-Licensed PPSIs are required to provide to Customers similar to how the Truth in Savings Act standardizes disclosures for share accounts, so that Customers can easily compare Payment Stablecoin products, redemption terms, and fee structures across issuers?”
The NCUA should standardize disclosures. As the NCUA itself acknowledges, consumers will be confused by how payment stablecoin systems work, who the issuer is, and what consumers’ rights are.
In addition to the Truth in Savings Act, regulators of other consumer statutes have promoted standardization and facilitated compliance by publishing 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 NCUA’s Notice of a change in fees
The Act requires issuers to “publicly, clearly, and conspicuously disclose in
plain language all fees associated with purchasing or redeeming the payment stablecoins, provided that such fees can only be changed upon not less than 7 days’ prior notice to consumers.”
The NCUA’s proposed rule clarifies that the seven days prior notice means seven “calendar days.” This is a welcome addition. Unlike “business days,” the meaning of calendar days is clear.
Question 100 asks whether the proposed rule is correct in requiring issuers to deliver notice to current customers “whenever they change fees.” The question then clarifies what it means by “whenever” by asking whether the notice should be waived if the change is a decrease in fees.
Issuers should be required to notify consumers of a decrease in fees. The Act requires notice of “all fees.” In addition, consumers need full disclosure, even if it is a decrease in fees. Consumers need to know the actual total 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 payment stablecoins.
The NCUA should adopt Proposed § 706.203 (d)(1)(iv) and (d)(2) that require issuers to update the disclosure of “All fees associated with purchasing or redeeming Payment Stablecoins,” “if there are any changes” in those fees.
Question 100 also asks: “Are there any specific methods or modes of communication that the NCUA should require? If so, which modes of communication would be most effective and appropriate?”
Issuers should be required to use every mode of communication that the issuer has available to it. If the issuer has the consumer’s email address, it should be required to send an email with the required information. If the issuer has the consumer’s cell phone number, it should be required to call or send a text message to the consumer. That is what financial institutions do now when they want to sell goods and services to consumers, so apparently there are no technical obstacles to doing so.
It should never be sufficient for the issuer to merely post a communication on its website. The NCUA should decide what modes of communication to require by taking into consideration that, as the NCUA acknowledges, consumers are unfamiliar with payment stablecoins and how the system operates. In addition, communications such as an increase in fees may have a serious impact on those consumers who live paycheck to paycheck. Therefore, the NCUA should require issuers to do their utmost to inform consumers.
In its Final Rule, the NCUA 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.[11]
The NCUA should limit fees
In Question 99, the NCUA asks: “Are there limitations that the NCUA should impose on redemption fees, e.g., to discourage run risk or to encourage price stability?”
The only major consumer right in the Act is the right to redeem. If issuers can impose unreasonably high redemption fees, they may be able to make it impossible for many consumers to exercise that right.
There are many legitimate reasons why consumers may need to redeem some or all of their payment stablecoins. For example, because of the fragmentation of the market a consumer may need to redeem payment stablecoins purchased from Issuer A in order to buy payment stablecoins from Issuer B.
Circumstances may arise that alert consumers to the fact that payment stablecoins are inherently risky purchases. Because there is no insurance, consumers are likely to try to redeem their payment stablecoins if there is any indication their issuer or its affiliates or third parties involved in their payment stablecoin transactions may be in financial trouble. Even news of the financial troubles of other issuers may trigger a run, especially since that type of news may go viral in a very short time.
Consumers will be especially anxious if they learn they may not recover their funds if the issuer files for bankruptcy.[12]
It was Congress’ objective in passing the Act to encourage a successful new payment system. If issuers are permitted to deny consumers their one vital right by charging unreasonably high fees that they cannot afford to pay, consumers will lose their trust and confidence in that system and avoid using it. After all, most have the alternatives of credit and debit cards where they have far more substantial rights under federal law.
In addition, to prevent unfair practices and promote consumer trust and confidence, the Final Rule should impose limits on other fees. Financial institutions are notorious for imposing all sorts of surprising “junk fees.”[13] For instance, financial institutions impose excessive overdraft fees, NSF fees, “administrative fees,” and “service fees.” Issuers may charge a fee when a consumer requests a statement of account or requests an explanation of a processing delay.
The Final Rule should include Proposed § 706.202(g)(3) that provides that if an issuer is required to begin liquidation and redeem outstanding payment stablecoins, it may not charge customers a fee to redeem their payment stablecoins at any time during the liquidation. It is bad enough that consumers may not be able to get all of their money back, through no fault of their own. To charge them fees for a return of at least some of what is theirs adds further injury to the harm that the issuer’s liquidation may cause consumers.
The NCUA Final Rule should adopt the segregation and format standards in the Proposed Rule, define “conspicuous,” and prohibit web designs that impede redemption
The Act requires issuers to publicly disclose their redemption policy. In doing so, they must “establish clear and conspicuous procedures for timely redemption of outstanding payment stablecoins.” In addition, they are required to “publicly, clearly, and conspicuously disclose in plain language all fees associated with purchasing or redeeming the payment stablecoins.”
The proposed rules require issuers to “publicly, clearly, and conspicuously disclose [certain information] in plain language and in format that is readily noticeable to Customers, [and] readily understandable by Customers.” In addition, the “NCUA is proposing to include the requirement that the disclosures be segregated from other information to ensure that the information in the disclosures is not combined with other non-relevant information that could obscure the importance of these disclosures.”
As the NCUA points out, these requirements are “consistent” with the Act. Furthermore, as the NCUA notes, they “are particularly important in the situation where an NCUA-Licensed PPSI issues more than one brand of Payment Stablecoin either directly or through an Affiliate.”
Failure to include these requirements would seriously undermine the Act’s disclosure standards. Without the proposed elaboration of the Act’s vague standards, some issuers may take advantage and make disclosures that are not “readily noticeable” and “understandable.” As the NCUA explains, its proposal “provide[s] more certainty on what it means to ‘publicly, clearly, and conspicuously disclose [the information] in plain language.’” Moreover, as the NCUA says, its proposals “are necessary to prevent [consumer] confusion.”
The proposal’s requirements are necessary given the special challenges consumers face when disclosures are made on cell phones and websites.
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.[14]
However, the Final Rule should include more detail in order to accomplish the proposed 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 NCUA’s proposed regulations. The NCUA should provide a definition that takes into account disclosures that are made on the issuer’s website.[15]
The Act requires a “clear and conspicuous” procedure. The NCUA 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.[16] Requiring consumers to scroll all the way down to the bottom of a page in order to find an important disclosure.[17]
Disclosures should be required prior to consumers’ purchases
In Question 102 the NCUA asks whether it should “take any steps to unify required disclosures so that they are all provided to Customers at a specific point during the relationship?”
Required disclosures should be unified and provided to consumers before consumers are committed to purchase payment stablecoins.[18] Not requiring disclosures until some later time would seriously undermine the Act’s most important protections. In addition, issuers should be required to provide consumers with periodic disclosures as is required by other federal consumer statutes.[19]
As discussed above, the NCUA could facilitate the unification of disclosures by publishing Model disclosures as provided for in other consumer laws.
The NCUA 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.[20] 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.”[21] 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 NCUA’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 NCUA should be cautious if it decides to specify how the FTC Act could apply
In its proposal, the NCUA asks: “Should the NCUA specify how section 5 of the FTC Act relating to unfair or deceptive acts or practices could apply to how the NCUA evaluates the disclosures?”
Specifying how section 5 applies would provide issuers with guidance on what acts and practices the NCUA would regard as unfair and deceptive.
However, the history of section 5 violations clearly shows that what constitutes unfair and deceptive acts or practices evolve over time. This evolution is essential as entirely new systems enter the marketplace, such as payment stablecoins. New types of businesses, such as fintechs, market their products and services.[22] Companies use innovative tools to entice consumers, such as artificial intelligence. There are always some companies that test the limits of what may be legal.
Consequently, if the NCUA decides to specify how section 5 could apply, it should make it unmistakably clear that its descriptions of unlawful conduct are not the only ones that may violate section 5. They are merely illustrative. The NCUA should state that the conduct they describe includes, but is not limited to the ones they specify. Other conduct also may be unlawful.
The NCUA 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 NCUA’s Final Rule should clearly state that state consumer laws, including laws protecting consumer privacy, are not preempted by the Act.
The NCUA Final Rule should include AI and automated decision making guardrails
Question 196 of its proposed regulation asks:
Should the NCUA establish any guardrails on the use of artificial intelligence or automated-decision making systems by NCUA-Licensed PPSIs in the context of risk management, redemption processing, or reserve asset management?
Question 196 also asks what the NCUA regulations should do to address potential fraud.
The Final Rule should definitely include guardrails on the use of AI or automated-decision making systems. The GENIUS Act specifically requires issuers to comply with its risk management requirements that include “information technology risk management principles-based requirements and standards.”[23]
AI poses one of the greatest risks to payment stablecoin systems, whether it is agentic AI, embedded AI, or whatever new form of AI is developed in the future. Fraud is one of the most serious threats that AI poses.[24] Including AI guardrails in the Final Rule is vital to help prevent fraud.
The NCUA 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 insurance, NCUSIF insurance or comparable insurance protects their payment stablecoins. This is a reasonable assumption since in many instances consumers will use the FDIC NCUSIF-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.”[25]
The NCUA’s 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 consumers may lose all of the money they used to purchase their stablecoins from that issuer.[26] The disclosure should be provided to consumers before they become obligated to purchase payment stablecoins. The NCUA should require that disclosure in all agreements with consumers and prominently on the issuer’s website.
The NCUA should protect consumer privacy
The NCUA’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.”[27] 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.”[28] Obviously, one of the objectives of these requirements is to protect customer privacy.[29]
The NCUA 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.[30]
Because several states have strong consumer privacy laws, it is important for the NCUA’s Final Rule to make it clear that state laws protecting consumer privacy are not preempted even if the issuer is in bankruptcy proceedings.
If the NCUA fails to do this, NCUA rules to protect privacy can be completely undermined. When an issuer is in bankruptcy, under certain circumstances the sale or lease of personally-identifiable consumer information can be sold to the highest bidder.[31] Several states have privacy laws that may prevent that information from being sold or leased. The Final Rule should ensure that the Bankruptcy Court applies state privacy law.
Applying state privacy law is consistent with the Act. In that federal legislation, Congress amended the Bankruptcy Code to assist consumers holding payment stablecoins when an issuer is in bankruptcy. It did this by granting consumers a more favored position than most other unsecured creditors. A Final Rule protecting consumer privacy when the issuer is in bankruptcy furthers that objective.
The NCUA should prohibit issuers from providing credit to purchase payment stablecoins
The NCUA should adopt the FDIC’s proposed regulation that prohibits 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 NCUA 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 Act does include some consumer protection and the NCUA should issue a Final Rule that ensures consumers will have the benefit of that protection as recommended in this letter.
Respectfully submitted,
Mark E. Budnitz
Bobby Lee Cook Professor of Law Emeritus
Georgia State University College of Law, Atlanta, Georgia
[1] The definition of “customer” is not the same in the regulations of the NCUA, the OCC, and the FDIC. As the American Bankers Association noted in its comment on the FDIC’s proposal, “divergent definitions will produce inconsistent consumer protection outcomes depending solely on which agency supervises the issuer, an outcome that is neither consistent with the GENIUS Act’s framework, helpful for consumers, nor justifiable on policy grounds.” Aislinn Keely, FDIC Urged to Align Stablecoin Rules With Other Regulators, LAW360, June 11, 2026.
[2] National Credit Union Administration, Implementing the GENIUS Act, 91 Fed. Reg. 28956, 28985 (May 18, 2026)(hereafter NCUA Regs).
[3] Id. at 29009. “[W]e could very well be one major fraudulent transaction away from eroding the consumer trust and confidence which form the bedrock of our financial system.” Prathamesh Khedekar, Banks need to leverage big data to combat a surge in AI-enabled fraud,
AMERICAN BANKER, March 25, 2024.
[4] 91 Fed. Reg. 28956, at 28986.
[5] Am. 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, at 8.
[6] Commenting on the “trust and confidence placed by depositors in financial institutions,” the Comptroller of the Currency noted that “banks survive primarily on public trust….” Comptroller of the Currency, Disposition of Credit Life Insurance Income, 41 Fed. Reg. 29846, 29847 (1976).
[7] 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).
[8] See the Electronic Fund Transfer Act that provides a financial institution is not liable if its failure to comply with the EFTA is due to “Acts of God and technical malfunctions.” 15 U.S.C. § 1693h(b).
[9] Bank Trade organizations have described white labeled payment stablecoins and the substantial role the sponsor may have. 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, at 8. “The sponsor may also retain the right to make key decisions about the relevant payment stablecoin, including regarding pricing, target ‘use cases,’ customer relationships and liquidity and redemption policies. These arrangements can blur the line between the issuer and the sponsor, especially as the sponsor may obtain significant economic benefits, including payments from the issuer, tied to uptake and use of the relevant payment stablecoin.”
[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] 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.
[12] 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.
[13] Consumer Financial Protection Bureau, “Junk Fees,” www.consumerfinance.gov//rules-policy/junk-fees/.
[14] See for example, Tejon v. Zeus Networks, 174 F. 4th 1322 (11th 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).
[15] 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.
[16] “Disclosures that are an integral part of a claim or inseparable from it should not be communicated through a hyperlink.” dotcomDisclosures, id. at 10.
[17] “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.
[18] 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.
[19] Gramm-Leach-Blilely, 15 U.S.C. § 6803; Truth In Lending, 15 U.S.C. 1637(b); Electronic Fund Transfers, Reg. E, 12 C.F.R. § 1005.9.
[20] 12 U.S.C. § 5531(a).
[21] 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).
[22] In addition to fintechs, major banks, Visa and Mastercard are planning to enter the stablecoin market. John Adams, PayPal boosts its stablecoin as banks prepare to launch a share one, AMERICAN BANKER, July 9, 2026.
[23] GENIUS Act, § 4(a)(4)(A)(iv).
[24] “AI fraud has arrived, and our defenses are not yet ready. What makes this moment different is not just the sophistication of attacks but their scale. Generative AI can churn out thousands of convincing scams in seconds….” Shlomit Wagman, AI-enabled fraud is a problem right now, and we are not ready, ThinkBank, Nov. 4, 2025, www.thinkbank.com.
[25] 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.
[26] 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.
[27] NCUA Regs at 28988.
[28] Id.
[29] The OCC uses the term “data privacy” in a question about the security provisions of its proposed rule. Implementing the [GENIUS Act] for the Issuance of Stablecoins by Entities Subject to the Jurisdiction of the Office of the Comptroller of the Currency, 91 Fed. Reg. 10202, at 10260 (hereafter OCC Regs).
[30] OCC Regs, § 15.13(b)(4).
[31] The Bankruptcy Code provides limited consumer protection when the debtor seeks to sell or lease “personally identifiable information about individuals.” 15 U.S.C. § 363(b)(1). See also § 332. But that provision applies only if the debtor has a privacy policy and discloses that policy to the consumer. In addition, it has a “narrow definition” of personally identifiable information. Laura N. Coordes, Unmasking The Consumer Privacy Ombudsman, 82 MONTANA LAW REVIEW 17, 25 (2021).
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