Government Relations - Electronic Transactions Association

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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.

Vermont Senate Clears Interchange Bill

After an intense few days of lobbying by retailers, banks and the payments industry -- including ETA --the Vermont Senate has passed a milder version of a bill to regulate interchange fees.

The measure, which is believed to be the first of its kind in the nation -- now goes to the Vermont House, where the battle over interchange is likely to heat up over the next few weeks.

ETA Joins More Than 30 Organizations to Oppose Current CFPA Bill

The Electronic Transactions Association has joined with more than 30 other industry groups to oppose the current version of consumer financial protection legislation now before Congress.
In a joint letter to Sen. Chris Dodd (D-CT) who chairs the Senate Banking Committee, and Sen. Richard Shelby (R-AL), the ranking minority member, the industry groups said they "agree reform is necessary and firmly support enhanced consumer protection [in financial Services]."
However, the letter warned that the current Senate bill "is not the correct approach because it will have severe unintended consequences for consumers, small businesses, and the economy. As such, simple structural modifications to the CFPA that do not address the following concerns will not mitigate these unintended consequences."

Read the full letter here.

ETA Members Discuss Interchange System With GAO

Representatives of ETA and several member companies participated in a 90-minute conference call on August 13 to explain the components and operation of the interchange system to representatives of the U.S. Government Accountability Office.

GAO is conducting research for two reports on the interchange system, one requested by the Senate Small Business and Entrepreneurship Committee, the other required by the CARD Act, signed into law in May, 2009.

During the call, ETA members explained the different layers of the electronic payments system and defined the types of third-party businesses engaged in processing electronic payments. They also drew distinctions between the interchange rate and the discount rate, emphasizing that interchange is but one component of what merchants pay for electronic payments services. ETA detailed the high level of competition in the discount market and that, in fact, a small retailer has a greater ability to negotiate a favorable price for transaction processing than for any other utility required to run a business.

ETA directed GAO to data on the numbers, types, and value of transactions processed in a year, as well as to information showing the essential role of merchant acquirers and independent sales organizations (ISOs) in the electronic payments system.

ETA representatives will continue to work with various government agencies to provide assistance and information about the businesses they represent. ETA will also continue to engage legislators and regulators to ensure that they receive a balanced and complete picture of the electronic payments system.

ETA Releases Policy Position on Data Security, Breach Notification

ETA has released a policy position on data security and breach notification, in which the association srongly supports industry self-regulatory efforts for the protection of cardholder data, foremost of which is the Payment Card Industry Data Security Standards (PCIDSS). In the area of government regulation, ETA believes that a uniform national standard for data security and breach notification with respect to Personal Financial Information would best balance the rights of consumers to be notified of a breach when the security of their Personal Financial Information is truly at risk, while minimizing the compliance and legal risk to businesses.

Read the full position paper .

State Legislation and Regulation

Data security remains a top subject in many 2010 legislative sessions, but at least two states have taken up the cause of retailers complaining about card "swipe fees."

Vermont has approved legislation broadening the rights of merchants to pass on interchange fees through pricing and discount practices and other measures, while Georgia also is considering interchange-related legislation.