Apple's First-Ever CFPB Lobbying Focuses on Mobile Payments

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An Apple store. Credit: Mike Scarcella [/caption] Apple Inc. lobbied the Consumer Financial Protection Bureau for the first time earlier this year, advocating on mobile payments at a time when many companies are striving to convince the agency’s new Republican leadership to grant regulatory relief. The iPhone maker directed its lobbying “on issues related to mobile payments” not just at the CFPB but also at Congress and the U.S. Treasury Department, according to a disclosure of its advocacy work in the first three months of 2018. Apple reported in the disclosure, submitted April 20, that the work was spearheaded by in-house lobbyist Jeff Dobrozsi, a former chief of staff to Republican U.S. Rep. Charles Boustany of Louisiana, now a Washington lobbyist at Capitol Counsel. Dobrozsi joined Apple's Washington office in 2014. Dobrozsi and an Apple spokeswoman did not immediately respond to requests for comment Monday. According to the disclosure form, Apple spent $2.14 million in the first three months of the year lobbying not only on mobile payments but a host of other issues, including tax reform and the Federal Communications Commission’s recent repeal of the net neutrality policies set under the Obama administration. The amount was the second-highest the company had ever spent in any quarter, according to a review of past disclosures. Apple had lobbied on mobile payments in previous quarters, although its efforts were restricted to the House and Senate, according to a review of past disclosures. The company’s foray into directly lobbying the CFPB came during the same quarter in which the agency relaxed the provisions of its prepaid card rule, a 2016 regulation covering mobile wallets that required companies to clearly disclose fees and cooperate with consumers who discover unauthorized charges or errors in their accounts. In January, two months after the Trump administration installed White House budget director Mick Mulvaney as the CFPB’s interim director, the agency unveiled changes to the rule intended to make it easier for consumers to link their credit cards to mobile wallets such as Apple Pay and Google Wallet. In a news release announcing the move, the CFPB said the changes “reduce potentially unnecessary complications and expense to consumers who link credit cards to digital wallets.” The CFPB also delayed the rule’s effective date by a year, to April 2019, citing industry concerns about being able to comply in time. According to his public calendars for the early months of 2018, along with sources familiar with his time leading the CFPB, Mulvaney did not begin meeting with trade groups and other industry players until February. Apple’s lobbying could relate to Mulvaney’s call in March for comments on the CFPB’s regulations. “Apple is obviously a huge player in this space and has been for a while. I think they had a pretty good idea of where they stood with the prior administration, which was open to mobile payments technology and saw it as a way to give access to underbanked people. My guess is Apple wanted to see where they stood with the new administration,” said Davis Wright Tremaine partner Jonathan Engel, a former CFPB enforcement attorney. Engel said many of the changes were set in motion under former CFPB Director Richard Cordray. In 2015, CFPB released a report noting that mobile financial services such as digital wallets had the potential to integrate underserved consumers into the mainstream marketplace. “The substantive changes were going to happen under Cordray. It’s not as clear he would have extended the compliance deadline by a year. That was certainly a big win, buying them another year for compliance,” he said. With its recent lobbying of the CFPB, Apple joins a cadre of industry groups and financial companies that have long engaged the agency on the prepaid card rule and its implications for digital wallets. The Electronic Transactions Association, a trade group representing Apple and top credit card companies, has lobbied the CFPB since 2015 on mobile payments issues—specifically the prepaid card rule. The ETA was joined that year by one of its most prominent members, American Express Co., whose other lobbying interests included the agency’s consumer complaints database and the study that laid the foundation for a rule banning arbitration clauses in financial contracts that prohibited consumers from coming together to file class action lawsuits. The CFPB finalized the rule in July, only to see it vacated under the Congressional Review Act—a 1996 law that Republicans wielded with devastating effect last year, undoing more than a dozen regulations issued at the end of the Obama administration. PayPal, another member of the Electronic Transactions Association, has lobbied the CFPB on “mobile payment innovation” dating back to late 2015, according to a review of past disclosures. Read more:Paul Hastings Will Lobby on Marijuana for Mobile Payments VentureMark Zuckerberg Brings In-House Legal, Lobbying Entourage to Capitol HillFinancial Industry Pushes for More Secrecy at Mulvaney's Consumer BureauThree Things Companies Hate About the CFPB's Investigative Demands

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