Witherspoon Examines School Lunch Payment Processing Fees, Increased CFPB Scrutiny in Law360

11.07.2024

Stinson LLP attorney Tom Witherspoon authored an article for Law360, "CFPB School Lunch Focus Could Expand E-Payment Scrutiny."

Witherspoon examines the Consumer Financial Protection Bureau's (CFPB) efforts to combat "junk fees" in school lunch payment processing. He highlights the CFPB's concerns regarding the increasing prevalence of the fees, particularly as schools transition to cashless systems and partner with online payment platforms that often charge families for the service.

Witherspoon examines the agency's emphasis on ensuring fair, transparent and legally-compliant payment options for all account holders, focusing on the impact on low-income families as well as the availability of free alternatives and the level of market competition. He notes that the CFPB's scrutiny is not limited to school lunch payments, emphasizing its broad application to the regulation of digital wallets and payment apps in other contexts.

"It's clear school lunches are yet another entry point into a conversation about the CFPB's consumer protection authority with respect to payment processing fees," Witherspoon writes.

Witherspoon says the agency is signaling its intent to closely examine the entire payment system, particularly with its proposed rule to expand its supervisory power, and emphasizes that they appear ready to use their full regulatory authority to meet policy objectives, all the way down to the school lunch market.

Witherspoon's practice focuses on payments, consumer financial products, and other bank and financial regulatory matters, with an emphasis on compliance, financial transactional and litigation matters. He helps banks and other financial institutions navigate the complexities of federal and state law and regulation applicable to their operations, relationships, product development and compliance management.

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