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Government Relations ETA works with Congressional offices and committees to represent our members' interests and to make sure that those interests receive a full and fair consideration in the development of legislation that affects the payments industry. We also engage, through outreach and education, the executive branch agencies and policymakers whose decisions often affect our members and the way they do business.
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ETA Releases Summary of IRS Reporting Rules |
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Earlier this week, the Internal Revenue Service released final regulations to implement tax code Section 6050W and related statutory changes enacted by the Housing Assistance Tax Act of 2008. The regulations require payment settlement organizations to report payments in settlement of payment card and third-party network transactions annually. The Electronic Transactions Association submitted comments to the IRS earlier this year on the proposed regulations and today has released a summary of how the final regulations address ETA’s concerns.
Read the full summary. |
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Senate Passes Financial Reform Bill |
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UPDATE: July 21, 2010 - President Obama signed the Dodd-Frank Wall Street Reform Legislation in a White House ceremony today.
 The U.S. Senate has passed financial services reform legislation — which includes the Durbin amendments that affect interchange fees on debit card transaction — by a 60-39 margin. Earlier in the day, a threatened filibuster on the bill was derailed by a 60-38 vote.
President Obama is expected to sign the bill next week.
ETA Chief Executive Officer Carla Balakgie issued the following statement after the bill passed:
"While passage of the Dodd-Frank bill was expected, ETA is disappointed that Congress chose to use this measure as a way to interfere in the commercial contracts between merchants and the institutions that provide full access to electronic payments that consumers clearly want to utilize. ETA will continue to oppose attempts by Congress to impose unnecessary regulation on private business relationships — on its own and in partnership with the rest of the payments industry." |
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Senate Delays Gift Card Rules |
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The U.S. Senate Tuesday approved legislation delaying the implementation of some of the provisions of the Credit Card Accountability Responsibility and Disclosure Act, that would have outlawed millions of unsold but manufactured gift cards.
The bill applies to gift cards produced before April 1, and delays a requirement that such cards prominently display expiration dates and other information on the actual card.
The Network Branded Prepaid Card Association had sought the delay, arguing that requirements pertaining to the display of expiration dates would result in more than a hundred million gift cards having to being scrapped.
Other gift card requirements established by the Federal Reserve, per the CARD Act will still go into effect Aug. 22 as planned. |
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Durbin Calls Interchange Hearing for June 16 |
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While a U.S. House and Senate conference committee works on financial reform legislation, Sen. Richard Durbin (D-IL) will try to shoreup support for his amendment on interchange regulation by holding a hastily-called hearing on Wednesday June 16, before the Senate Appropriations Committee's Financial Services and General Government Subcommittee. Durbin chairs the subcommittee.
Witnesses include representatives of the Treasury Department, Government Accountability Office and Amtrak, along with Bruce Sullivan, Vice President of Government Solutions for Visa Inc., Ed Mierzwinski, Consumer Program Director, U.S. Public Interest Research Group, and Wendy Chronister, President and CEO, Qik'n EZ Stores, Springfield, Illinois.
The hearing comes as opposition to Durbin's interchange amendment began to develop in the House. Rep. Debbie Wasserman Schultz has persuaded more than 80 colleagues to oppose a Senate plan to regulate debit-card “swipe” fees.
Wasserman Schultz, a Florida Democrat and member of the House majority’s leadership team, and Kenny Marchant, a Texas Republican, are circulating the letter today to all House members urging them to fight the proposal, Wasserman Schultz spokesman Jonathan Beeton said in an e-mail. Another 81 House members signed the letter, Beeton said.
You can follow developments regarding the Durbin amendment at the Voice Of Payments, ETA's advocacy portal, which includes tools to help you contact your representatives in Congress. |
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George Mason Professor Slams Interchange Regulation |
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In a new white paper, Todd Zywicki, a Geroge Mason University law professor and fellow at the International Center for Law and Economics, says attempts by Congress to regulate interchange fees are doomed to backfire, offering few benefits while increasing consumer costs and reducing credit availability.
Zywicki notes that while merchants have complained that interchange fees are excessive, the cost is far outweighed by the savings that result when card issuers assume the cost of credit risk on their behalf.
"Rather than increasing consumer welfare in any meaningful sense, interchange fee legislation represents an attempt by some merchants to shift costs away from their businesses and onto card issuing banks and cardholders. In particular, bank-issued credit cards offer a dramatic improvement in the efficiency and availability of consumer credit by shifting credit risk from merchants onto banks in exchange for the cost of the interchange fee—currently averaging less than 2% of purchase value," Zwicki argues.
The George Mason legal expert also notes that interchange regulation has been tried in Australia, with unpleasant results:
"These unintended consequences [from interchange regulation] include increased costs and fewer benefits for cardholders. This is precisely what happened in Australia—the most complete experiment to date with regulating interchange fees—when the central bank in that country artificially capped interchange fees. Credit card customers in Australia now pay more for their cards and receive less in return, and there is no evidence that consumers, including those using cash or other forms of payment, have benefited at all or that overall economic efficiency has improved," he noted.
Read the full paper here. |
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