"The big thing that really needs to happen is the bank and the processor need to know what's going on. If they know, you have a ton of defensibility." — James Huber, Managing Partner, Global Legal Law Firm

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In this episode of Qredible Live, James Huber, Managing Partner at Global Legal Law Firm and host of the Payments Experts Podcast, joins CEO Brian Fitzpatrick for an in-depth conversation about payments compliance and crypto law podcast topics that matter most to high-risk merchants. From navigating hemp and CBD regulations to understanding how litigation can be used as a strategic tool, this discussion offers essential insights for ISOs, processors, and merchants operating in challenging verticals.

Full Episode Transcript

[00:26] Faith: Hi and welcome to season 3 of the Qredible Broadcast. Today we have James Huber, Managing Partner at Global Legal Law Firm and the host of the Payments Experts Podcast. And of course, we have our CEO of Qredible, Brian Fitzpatrick.

[00:48] Brian Fitzpatrick: All right, great to be back. And James, welcome to the Qredible Live Broadcast. Great to have you on board. It's interesting, all things payments, right? We're going to be talking about that today. And you've built a really interesting niche at the intersection of what I would call white collar defense, civil litigation, payments, and now crypto. You are often the person that processors call when they're trying to stay off the radar of agencies like the FTC, the CFPB, the Department of Justice, state attorney generals, or just even helping merchants who have been placed on the dreaded match list and dealing with opportunistic plaintiffs attorneys and class action litigation.

So from that foundation, you've become really one of the go-to legal minds helping payment companies and merchants solve these unique challenges and issues. You've even indicated that litigation can be used as a strategic tool rather than just a last resort. So kick us off. Would you give everybody a brief background on your journey into payments and fintech law and share the mission that drives your work today?

[02:17] James Huber: Yeah, absolutely. My partner Chris Dryden actually started the law firm and he had one big client. This client was by no uncertain terms probably the worst possible ISO out there. They're out of business now. They would go and they would lease merchants ten VX20s for a hundred bucks a month and say, "Oh, we're going to save you all this money, so don't worry about this lease." And we would actually go out and collect on these things because we were tasked to do that. And you actually win. The UCC Section 2A is one of the most draconian pieces of the law out there.

So we were doing a lot of collections. We were reviewing their agreements, ISO agreements, processing agreements, stuff like that. Really learning the industry with a fire hose. At the end of their reign of dominance, they were getting like three class actions a month, multiple regulatory bodies. But when we started with them, they were 13 people and they grew to 400 with five offices nationwide. I mean, they were something spectacular.

[03:22] James Huber: So I was working at the law firm. We had that one client and I was doing some criminal defense, personal injury, basically open door law firm, whatever came through. And then I was working on the payment stuff and I got to know some of the people working there and they said, "Hey, if you really want to expand in the space, you should go to this conference."

So I roll into ETA and I'm going around and talking to people and they're going, "Oh, hey, you're an attorney. Do you know Paul Rianda, Michael Brewer?" Three or four names. And I heard all of the same names over and over and over. And I'm looking around and they're going, "Oh, I'm an ISO. We do leasing and processing." And I'm going, "Wow, we've got one client who supports our whole firm. We're like maybe three or four attorneys at that point." And I just met like 200 of them. And I saw more all over.

[04:30] James Huber: So I do some research. I look up the payments attorneys and yeah, there's four in the space, maybe five. And there's some big firms that do it, but at the big firms, it's only like one or two guys. So I come back and I talk to Chris and I go, "Chris, we should just do this. Get rid of everything else." We had family law and just all this horrible stuff that's like fighting over emotions and we're going, "No, this is great. This is underserved." And we never looked back. We got rid of all our cases and we went payments only.

And then credit to my wife, she came in and she did a spreadsheet and she looks at the clients and she's going, "It's the ISOs. These ISOs are the clients that you should be focusing on." And I'm going, "That's great because they're my favorite ones." And so we really got to work with the ISOs and built the firm out. We realized that we weren't much use to people unless we know everything that's going on in the industry. So we were speaking at the conferences, reading everything.

[05:30] James Huber: And it's actually pretty nice. Most of the attorneys in the space, we all know that we're sitting in this totally underserved industry. So most of us get together and we don't refer a ton of cases out because we have a pretty big midsize firm at this point. We have maybe 18 attorneys in California, then we have five in Florida. But we're happy to collaborate with each other and talk about what's going on in our cases because it's a lot of the same issues coming up over and over again that we run into.

And then as far as compliance work, we're going, let's keep our clients out of litigation because at the end of the litigation, you're usually not happy with the result. You're a little bit mad at me because I was there. But again, credit to my wife. She has a joke. I was telling her, "My clients, some of them really like me. We went on vacation with this one client together. They like me." She's like, "Yeah, but they'd still probably prefer you don't exist."

[06:36] James Huber: So we've built our firm around building these sustainable relationships because if you're in the payment space, you're always having agreements coming on. The laws are always changing. Visa and Mastercard and the processors and the banks are always moving things around. So we've focused our firm on helping people get out of litigation and building those relationships because you can do a big case and it generates income for the firm, but having one case versus having a client for 20 years, I'd rather have the client for 20 years and just consult with them on a monthly basis and keep them out of litigation.

[07:09] Brian Fitzpatrick: Yeah. That's absolutely key and that's what I find. Fortunately, I have a great law firm that I've worked with over the years, and their mantra is the same: we do the right things, right? If we put ourselves in fire prevention mode, then we're not fighting fires. And that's really what Qredible is about as well, providing the tools to the ISOs, providing the tools to the banks, and providing the tools to the merchant to make sure that everybody's doing the right thing.

So we work in these high-risk verticals. I was curious to see what you thought about the top compliance guardrails that have to be in place for high-risk verticals like CBD, hemp, peptides, nutraceuticals, mushrooms, all the stuff that we're seeing coming up now. What do you think are the top compliance guardrails if they want to avoid the surprise subpoena or exam?

[08:26] James Huber: Well, the real compliance guidelines, the big thing that really needs to happen is the bank and the processor need to know what's going on. If they know, you have a ton of defensibility. When the regulatory—I mean, look, the regulatory environment we're in now, some of those acronyms you rattled off don't really exist anymore. If the CFPB is around in 3 years, I might be a little surprised. But the regulatory enforcement in this industry has been extremely light based on the volume and everything like that.

So as far as companies getting popped by the FTC and things like that, I mean, you can probably count them on all the digits you have.

[08:56] Brian Fitzpatrick: Or even the FDA. I mean, it's been spotty at best, right?

[09:10] James Huber: Yeah. And when it happens, we all start freaking out. We're going, "Oh my gosh, change your business." And they're going, "Take a deep breath. You're not doing it like that." The ones that are really outlandish, the ones that get popped by these guys are just straight up helping people commit fraud, committing massive cardholder fraud.

But when I saw what Qredible was doing, I was going, "This is perfect. This is what the industry needs because you guys really are packaging it all up, giving it all the compliance, 360 protection because the real relationship that needs to be preserved is that between the processor and the bank. If they're not mad at you, you're probably okay."

[09:58] James Huber: Now, I have a case right now where the bank basically didn't tell anybody that they were processing for marijuana transactions. And they actually, I mean, they really weren't, but they were holding money related to marijuana businesses. And it's pretty wild because they get popped by the OCC and they're mad at my client. My client's like, "What are you talking about? I've got this addendum here that says for cannabis related businesses that you guys signed. Like you didn't know?"

[10:26] Brian Fitzpatrick: So this is where you got to be careful with your partners too. So when I say you've got to keep the bank and everybody happy, you got to make sure the bank's not smiling asleep at the golf course.

[10:50] James Huber: Yeah. But the bank has to also keep the card brands happy, right?

[10:55] Brian Fitzpatrick: Yeah. Because I mean look at that case with BPLO Bank that Visa hammered down on. BPLO hammered down on the ISO, the ISO in turn, there was the suit down to the actual merchant. And that wasn't even normal payment processing. That was this whole issue which I still don't understand how this happens, but the cashless ATM, right?

[11:23] James Huber: So when I tell people, "Well, you can't give a credit card at a dispensary," they're like, "Yeah, I give my card." I said, "No, you give your debit card, right?" And they're handing out a miniature ATM to you, and you're doing a—you're buying $72 in weed, you're doing an $80 ATM transaction.

[11:44] Brian Fitzpatrick: But that was that whole case with that BPLO thing, right? Where they're like, "We didn't know."

[11:52] James Huber: Yeah. I mean, that case is still going though. But yeah, the claiming that they don't know is interesting. And my argument for the cashless ATM has always been, what's the difference if I pay right here and use an ATM versus the one that I walked by in the lobby, right? What's the difference? And the difference is they're mad because they're not getting the fees.

[12:20] Brian Fitzpatrick: Yeah. I mean, it doesn't make sense to me either. And speaking of this cannabis thing, you recently talked about how a quiet hemp rule could upend electronic payments overnight and effectively turn CBD merchants now into drug dealers in the eyes of the regulators. So for boards and risk committees, what does that kind of policy whiplash actually look like on the ground?

[12:55] James Huber: It hasn't been too bad. I haven't seen total panic. We have some very large CBD fulfillment production companies and they're not freaking out. At least they sounded pretty cool by the time I talked to them. I do know they freaked out that morning but then they go, "Look, we've got a year to figure this out and it's probably just some more people need to make some money off of it."

The farm bill, that was a little bit of a problem, that little loophole to cram that all through there. But thank goodness they just didn't rug pull the whole thing for multiple places. Like Texas, I think, what do we say, it was like an 8 billion dollar industry for Texas?

[13:44] Brian Fitzpatrick: Yeah. Crazy. And the thing is, I'm seeing the same thing with the ISOs and banks we're working with. A couple of them have sort of reversed course, but most of them are there. And what's surprising is our phone's been ringing off the hook with merchants and ISOs saying, "Help us get in compliance."

So I was wondering what's going to happen after this thing. But literally, we're getting people coming up on our website and signing up to get in our registry and download our COA management tools and our proactive compliance tools. So that's a hopeful sign. But if you're an ISO or payback with a big book of these products, when a rule like that hits, I think the practical steps are really to double down on control and compliance. I don't really think that this—I think there's going to be an extension. I'm hopeful, but I think it'll be an extension beyond the one year.

So do you think regulators and card brands are moving toward more of a regulation model, a better regulation model as opposed to this prohibit and derisk model?

[14:54] James Huber: Yeah, I mean, that would make sense. But I'm curious for you, when they're contacting you and saying, "Let me get in compliance," compliance with what?

[15:05] Brian Fitzpatrick: Well, the big thing is, look, one of our big specialties is product compliance, right? So first of all, getting the COAs matched up because they see that if there's going to be a regulatory change and there's going to be no Delta 8 products anymore, let's say, the kindergarten products that they're trying to sell that look like Froot Loops, this stuff has got to get controlled.

And if that stuff starts to get controlled and who knows what the revision is, it's all going to be about product compliance. It's all going to be about looking at the COAs and seeing what's in there and what's not in there. And that's what we do. We're the only company out there that electronically collects thousands. I mean, last week we processed like 25,000 COAs in the time it would take companies weeks to review. We did it in a matter of minutes.

[15:50] James Huber: Right.

[15:52] Brian Fitzpatrick: So we're interrogating those products. We're looking at them and we're saying thumbs up or thumbs down. So that's what I think they're all preparing for is this big hit on product compliance because everything else is table stakes, right? They needed to be doing that already, every state.

[16:09] James Huber: We know that they're not. And when a new product gets added, things slip through. But yeah, I think going towards getting as compliant as possible, that's always our advice. We're not the type of attorneys that say don't sell anyone anything and you have no liability. We're saying look, do your best and then just know what your exposure is.

And it's great what you guys have done because this isn't more work. It's actually less to have you guys doing it. Doing these things manually, we've had litigation over this of, did the bank know that these guys were actually selling weed or did they underwrite these files? And I've done that process manually. And I'm a very fast efficient person, but this takes forever.

[16:53] Brian Fitzpatrick: Yeah.

[16:55] James Huber: And then you get done and you're like, okay, now got to do it again because you just added something. So yeah, I think more compliance. Look, I don't think anyone wants to lose this industry or this business. The card brands don't. The state governments don't. And I think it's just a matter of some money needs to change some hands. But I do know that the lobbyists are going to figure this thing out.

[17:28] Brian Fitzpatrick: Yeah, I'm sure they are. But what's interesting is you kind of sit at the intersection of payments litigation and crypto compliance as well. So for companies like true cannabis type companies who can't really use regular card programs, crypto is a good alternative, right? So what has to be true from a KYC, sanctions, travel rule compliance for crypto payments to actually become mainstream? Because there seems to be a lot of talk about it but a lot of like, how does this practically get into the mainstream and how does it become defensible as a mainstream payment alternative?

[18:22] James Huber: I personally am a little biased. I really don't ever see it happening of crypto being anything other than just an investment tool. Now, stable coins, sure. But as far as all the various coins, they're just for investment. Nobody's—there's no reason to use it.

We did see it when Bitcoin's going crazy like this, people were using it to buy cars and to go to the strip club. You buy a car because you're going, "Oh, great. Free car because Bitcoin just went up 300%." And you go to a strip club because there's no receipt.

[18:49] James Huber: So we saw that a little bit, but then like when they're trying it for movie theaters and things like that, no. As far as using it to buy and sell marijuana or cannabis, absolutely not. You've got the blockchain, you can see it, you're flying all over state lines.

But waiting for the news update, they're supposedly going to reclassify marijuana too. And then that really throws things up. I mean, schedule three, I don't know how Visa and Mastercard are going to feel about that. But I'm sitting here waiting as I know I have a ton of clients who are probably going, "Oh no, are we going out of business tomorrow?"

[19:42] James Huber: And this is what I've kind of said to people in the space: look, the second this gets popped, it's free reign for these companies. And maybe it's good because you have the in, you have the relationship with all of these. But any minute here, phones could start ringing off the hook.

[19:58] Brian Fitzpatrick: So that's always an interesting question though. So if they go schedule three, that's not legalization, that's just rescheduling, right?

[20:05] James Huber: Rescheduling. But that's Tylenol with codeine is schedule three. And you know, I've got Jeremy back there working the cameras probably sipping on some cough syrup right now.

[20:20] Brian Fitzpatrick: Yeah. Well, I don't know what you're talking about. But the thing is, what's interesting about this is, I've heard varying interpretations of what Visa, Mastercard, Amex are going to do. Many say, well, it can't be three. It's got to be federally legal for the card brands to really endorse this thing. What are your thoughts about that?

[20:50] James Huber: Well, when I go to the pharmacy, I pay with my card. I don't know. We get into a weird issue with, number one, Visa and Mastercard probably, it's my opinion, do not care one way or another. They don't want to get the doors kicked in. They're making the money. They're making their money either way. Whether you're at the ATM, you're at this, that, the other thing.

Everyone's going, "Oh, cashless ATMs are illegal." And they're so mad. Guess what? Nothing's happened. There's one lawsuit out there that said, "Oh, these are really bad." But they haven't done anything about it because they don't care. They're making the money either way.

[21:34] James Huber: What they don't want is people using crypto. But I don't think they even care about that either because how do you get your money onto the crypto? You use them. So one way or another.

And they've said if crypto were to capture 3% of money transactions, it would be wildly successful. Like one of the most successful infiltrations into any business. It's not—I don't really see it happening.

So as far as what Visa and Mastercard will do, my guess is that they're going to be okay with it. Because right off the bat, if it goes schedule three, you go more towards what was the medical, in the early days, California, for example. You go to your doctor and you're going, "Ah, I'm worried sometimes. Here you go."

[22:20] Brian Fitzpatrick: Right.

[22:22] James Huber: And I think that market still exists in many states. I think Florida is one. But yeah, if you're going through that compliance, I don't see why they would have any issue with it.

[22:34] Brian Fitzpatrick: Well, we're rooting for it for obvious reasons, right? Because first of all, I'm a believer in the product, in a safe, transparent industry. But secondly, we've built our whole company around product level compliance. And when that happens, our business is going to continue to take off. So we're rooting for it.

So you said that litigation can be both a sword and a shield for payment companies. In the context of cannabis, hemp, CBD, and supplements business and nutraceuticals, everything we're seeing, where have you seen litigation used proactively, either to challenge overreach or to set clearer rules for compliant players?

[23:22] James Huber: Well, I mean, the biggest way is it a sword is to one, take out a competitor, make their life hard, or get your upstream and downstream vendors to stand up straight. Underpaying.

One of the things that's frustrating in the cannabis space is you are dealing with drug dealers. And when it first came, they were drug dealers yesterday and now all of a sudden they've got a license, so they're not. But they still are. And they still have that mentality. And nothing against it—the person, the guy working the corner is probably one of the smartest guys you'll ever run into. He's out there surviving, literally fighting. Everyone's coming to get him.

[24:05] James Huber: But they operate on a different mentality. And so you use that proactively. Yeah. To go, no, here are the rules. We have an agreement. The agreement's not, I have to come and listen to your dumb records and not be scared of your dog to get that and not be creeped out that your mom's smoking cigarettes and knows we're all up here.

So no, there's an actual agreement now that we have to operate by to conduct these transactions. So in the cannabis space, the other problem is people are worried. They don't want to throw up the flag saying, "Hey, I'm in this space." And then there's also the concern of, look, two cocaine dealers can't go into court and sue each other over a transaction that went bad, right? Because everything they're doing is illegal.

[24:50] James Huber: But that's not the case with marijuana companies because it is state legal. And we actually set some precedent in federal court. Someone brought that up and we're going, "Do you want to take on this fight? Because if it says no, then you can't sue on your contracts in federal court." But the judge agreed with us and we set some really good precedent out there that no, even if you're in the cannabis space, the courts are available to you to go after people. And then of course collecting money owed from very—like I said, these are drug dealers and they're shady sometimes.

[25:36] Brian Fitzpatrick: Yeah. No, it's a great perspective. And one of the things—what do you really think is the sort of what we're in for for 2026 and these regulatory trends? What worries you most for fintech and paybacks as far as this craziness that we see going on in federal action?

[26:05] James Huber: Yeah, I mean the problem right now is just the total unpredictability. It is deregulation, heavy deregulation. What was signed this morning is states can't regulate AI, which seems scary given the subject matter potentials of Terminators taking us all over.

But the deregulation and just the uncertainty. So yeah, the rule of thumb is you're keeping your head on a swivel because you don't know tomorrow your whole business model—what if marijuana went to schedule nothing, is treated like alcohol? All of these cashless ATM companies, they're out of business.

[26:50] Brian Fitzpatrick: Yep.

[26:52] James Huber: For the most part, they're charging too much. If it's just a race to zero for everybody or a race to, do you have Qredible aligned? Are you helping me run my business?

So yeah, it is what it always is, but in this environment there's a whole lot more unpredictability. And it's pro big business. Visa and Mastercard, they're going to do what they want. The banks are going to continue to do what they need to do and have no liability ever for anything that they do.

[27:30] James Huber: So like I said, you always want to keep those relationships good. You want to make sure that they know what's going on. So at the brush of a pen, when somebody flips over a garbage can in your living room, you're going, "Okay, well, if we know where everything goes, we can put it all back together."

[27:50] Brian Fitzpatrick: Right? So it—whatever these changes end up being—my point has always been there's still going to be a BSA requirement. There's still KYB, KYC. There's still going to be product requirements. Even if the product requirements change and go down to zero THC, you still got to make sure that there's zero THC in these products.

And then we're also seeing—are you seeing a lot of these nutraceuticals? I mean we seem to see a lot of this mushroom world coming up rapidly now into the payment space and peptides, semaglutide, GLP-1 peptides. What are you seeing happening there?

[28:35] James Huber: The peptides are blowing up and we have, I don't know Jeremy, I think we get like 15 to 20 peptide merchants recently because they're just wholesale putting them on match.

[28:48] Brian Fitzpatrick: Yeah.

[28:50] James Huber: And we're almost wholesale getting them off match because what they're doing is not wrong. There's nothing wrong with peptides. They're not the end product.

So yeah, that one is really interesting. As far as mushrooms coming along, yeah, those are out there. And as far as running their payments, for the most part, I think they're all just flying under the radar.

[29:12] Brian Fitzpatrick: Yeah, I think—and that's why we're starting to see a lot of these merchants come to us because what we're trying to instill in the merchant side, first of all, we're trying to get the merchants to understand that the ISO has to play by the rules of the bank. The bank has to play by the rules of the card brands and the federal government.

[29:32] James Huber: State governments, local government.

[29:35] Brian Fitzpatrick: And the state and local government. So you can't just sort of look at your ISO and go, "Gosh, they're a pain in the butt." No, they have to do their job to stay in business.

So what we're really doing is providing a lot of the same tools to the merchant that the ISOs are using to see what's going on. So we're converting this black box into this glass box. We're trying to get these folks focused on fire prevention instead of firefighting because by the time you get on the match list, that's bad. You don't want to get yourself on the match list.

[30:11] Brian Fitzpatrick: And that's why we've always seen kind of eye to eye with that same philosophy with your firm. And you are the go-to guy in this space from a legal perspective. Your firm has done amazing things. And even talking to Noah Fitzgerald, our CRO, it's like, "Yep, he is the go-to guy for this."

And so, how do people get in touch with the go-to guy, you and your firm? How can they get in touch with you?

[30:45] James Huber: It's globallegallawfirm.com. Say law firm, legal, a whole bunch of times so people don't get confused about what we do. My email is jhuber, H-U-B-E-R, at attorneygl like Global Legal dot com.

[30:57] Brian Fitzpatrick: James, you're an incredible resource for this industry. We want to thank you for supporting and defending the industry and helping to really advance this because by keeping commerce safe and keeping these entities flowing and the money flowing in the right way, that's an important role and we believe we've got a mission there as well to fulfill. And we're continuing to do that and we appreciate everything you do.

We appreciate you being on Qredible Live. You've been a great guest and we got to definitely have you back next year as we talk about where this stuff's going. We're in a midterm year. We don't have a full 12 months to solve these issues, right? So we got to get it done soon.

[31:36] Brian Fitzpatrick: I've been spending a lot of time with senators and congressmen and in advancing a lot of these and putting the right language in these where the tools are important as well to keep everybody out of trouble. So we'll have you back to talk about that if you're willing to come join us back again on Qredible Live.

[31:55] James Huber: Absolutely. Yeah, I mean that's the hard work is getting people to understand what happens in the payments industry.

[32:05] Brian Fitzpatrick: It really is. So thanks for all you do there and thanks for joining us on Qredible Live. Faith, what do we have coming up next week?

[32:12] Faith: Next week we have Phil Vigent. He's actually been in the natural products industry for about 40 years and he's the CEO of Plant Fusion.

[32:22] Brian Fitzpatrick: Awesome. And I understand a lot of what he makes is sold up on Amazon as well. So we're seeing a lot of this stuff in payments on supplements as well. So supplement vendors, talk to James as well. He can help you out. So thank you for joining us here on Qredible Live and we'll see you next week.

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