The New Regulatory Standard: Navigating the NY FAIR Act and CFPB Digital Wallet Oversight

By The IntelliPay Complaince Team |20+ Yesr Expereince | Published Febraruy 12, 2026, |Last pdated February 2025

Executive Summary: The 2026 Compliance Pivot

As of February 12, 2026, the digital payment landscape has moved from a disclosure-based model to a fairness-driven mandate. Two massive regulatory shifts are now active, fundamentally changing the liability for businesses and government treasurers:

• The NY FAIR Act (Effective Feb 17, 2026): New York has expanded its General Business Law to prohibit not just “deceptive” acts, but also “unfair” and “abusive” practices. Crucially, this law explicitly protects small businesses and nonprofits, making B2B conduct—such as standardized billing, onboarding, and servicing—subject to intense scrutiny by the State Attorney General.

• CFPB Digital Wallet Oversight: The CFPB has finalized its authority to proactively supervise nonbank payment apps that facilitate over 50 million annual transactions. This move brings “Big Tech” wallets under the same rigorous examination standards as traditional banks, focusing on data privacy, fraud resolution, and the prevention of illegal “debanking”.

The Bottom Line: Compliance is no longer just about what you say (disclosures); it is about the actual outcome for the constituent or customer.

In a single week, the landscape for digital payments and business conduct has shifted dramatically. With the New York FAIR Act taking effect on February 17, 2026, and the CFPB finalizing its supervision of “larger participants” in the digital wallet space, organizations must pivot from basic fraud prevention to a comprehensive “UDAAP” (Unfair, Deceptive, or Abusive Acts or Practices) compliance model.

For small business owners and government treasurers, these shifts aren’t just technicalities—they redefine your liability and operational standards.

1. The NY FAIR Act: A “Mini-CFPB” at the State Level

Effective February 17, 2026, the Fostering Affordability and Integrity through Reasonable Business Practices (FAIR) Act represents the most significant update to New York’s General Business Law in nearly 50 years.

• Beyond Deception: Previously, New York law only prohibited “deceptive” acts. The FAIR Act expands this to include “unfair” and “abusive” practices.

• Small Business Protection: Unlike older consumer-focused laws, the FAIR Act explicitly includes small businesses and nonprofits as protected victims. This means the New York Attorney General (NYAG) can now investigate B2B conduct, such as standardized terms, billing practices, and vendor servicing.

• Enforcement Power: While private lawsuits are still limited to “deceptive” claims, the NYAG now has broad authority to bring enforcement actions for unfair or abusive conduct, regardless of whether it is “consumer-oriented”.

2. CFPB Digital Wallet Oversight: Leveling the Playing Field

The Consumer Financial Protection Bureau (CFPB) has finalized a rule that brings large-scale nonbank payment providers—specifically those facilitating over 50 million transactions annually—under the same federal supervision as traditional banks.

• Scope of Supervision: The CFPB will now proactively examine digital wallet providers for compliance with the Electronic Fund Transfer Act (Reg E) and the Gramm-Leach-Bliley Act (Reg P) regarding privacy and data security.

• Fraud and Dispute Resolution: The rule ensures that digital payment apps handle disputes directly rather than shifting the burden back to a consumer’s bank or credit union.

• Account Access (Debanking): A major focus of the new oversight is preventing “unlawful debanking,” where consumers or businesses lose access to their payment apps without notice or clear cause.

3. Key Takeaways for Organizations

As these regulations go live, small businesses and government agencies should take the following steps:

• Audit Your Billing & Terms: The FAIR Act’s “unfair” and “abusive” standards target practices that cause “substantial injury” or take “unreasonable advantage” of a lack of understanding. Ensure your pricing, fees, and cancellation terms are transparent.

• Review Digital App Providers: If your organization uses nonbank apps for disbursements or collections, verify that your providers are prepared for CFPB examination.

• Verify Compliance Defenses: The FAIR Act preserves a compliance defense for businesses that adhere to federal agency rules, making it more critical than ever to stay aligned with FTC and CFPB standards.

The Bottom Line

Whether it is the NYAG acting as a “mini-CFPB” or the federal government’s increased scrutiny of digital wallets, the message is clear: the era of “self-regulation” in digital payments is over. Moving forward, transparency is your best compliance strategy.

Need to modernize your payment infrastructure for these new standards? Contact an IntelliPay consultant at 855-872-6632 or sales@intellipay.com to ensure your payment channels are compliant and optimized for 2026 and beyond.

Frequently Asked Questions (FAQ)

NY FAIR ACT

• Does the FAIR Act only protect consumers? No. The Act explicitly expands protection to small businesses, nonprofits, and other market participants. The New York Attorney General can now investigate misconduct in B2B channels, including standardized contract terms and payment servicing.

• Can individuals sue for “unfair” or “abusive” acts under the new law? No. The right to sue for “unfair” and “abusive” conduct is exclusive to the Attorney General. Private lawsuits remain limited to “deceptive” acts.

• What defines an “abusive” practice under the NY FAIR Act? An act is “abusive” if it materially interferes with a person’s ability to understand a product’s terms or takes unreasonable advantage of their lack of understanding or inability to protect their own interests.

CFPB DIGITAL WALLET OVERSIGHT

• Which digital wallets are now under CFPB supervision? The rule targets “larger participants” handling at least 50 million U.S. dollar transactions annually. This primarily includes major platforms like Apple Pay, Google Pay, PayPal, and Venmo.

• Are cryptocurrency transactions covered by the new CFPB rule? No. The finalized rule specifically excludes digital assets (like Bitcoin) and is limited to transactions denominated in U.S. dollars.

• What is “debanking,” and why is the CFPB monitoring it? Debanking occurs when a user suddenly loses access to their payment app without notice. The CFPB is supervising this to prevent outages or arbitrary account closures that can disrupt a user’s ability to manage their funds.

Disclaimer

This article is provided by IntelliPay for general informational and educational purposes only. It does not constitute legal, financial, tax, or regulatory advice

Laws and regulations governing payment processing, including the New York FAIR Act and CFPB Digital Wallet oversight, vary significantly by state, jurisdiction, and specific business use case. These regulations are subject to frequent change and interpretation by state attorneys general and federal agencies.

Small business owners and government entities should consult with qualified legal counsel, their acquiring bank, and their payment processor before implementing new policies or altering current payment-handling procedures. While every effort has been made to ensure the accuracy of this information as of February 12, 2026, IntelliPay makes no representations or warranties regarding the completeness or applicability of the information contained herein to any specific situation