H.R. 2382 - A Real Sleeper

Do you want to lose your lunch? Go read H. R. 2382 – A Bill to amend the Truth in Lending Act to prohibit unfair practices in electronic payment system networks, and for other purposes. Its short title is the ‘Credit Card Interchange Fees Act of 2009’. Here is the Cliffs Notes version.

If enacted:
- Issuers, acquirers, processors and ISOs are prohibited from charging merchants different interchange or “other fees” for accepting rewards cards.
- Merchants can advertise charging different prices for accepting cash versus credit.
- Merchants can refuse to accept different types of Visa, MasterCard, Discover, American Express and other brands of debit, credit or prepaid cards based on the cost of accepting each type.
- Merchants can steer consumers to use the type or kind of payment alternative they prefer.
- Merchants can accept payment cards at one of their locations but not others.
- Merchants can set minimum and maximum purchase amounts for accepting different types of payment alternatives including credit and debit.
- Merchants can direct authorization and settlement transactions according to any route they choose.
- Acquirers, processors and ISOs cannot impose minimum transaction volumes on merchants nor charge a fee for failing to meet minimum transaction volumes.
- Merchants must be provided a copy all relevant rules and regulations to which they are subject under the terms of their merchant agreement.
- Merchants must be provided complete operating rules and regulations of all relevant networks that offer cards with logos.
- The FTC shall prescribe regulations that ensure merchants are not subjected to unfair trade practices by networks.
- The FTC shall prescribe regulations that prohibit any unfair, deceptive or anti-competitive act by networks.
- The FTC must regularly review all rules, terms and conditions established by networks, processors, acquirers and ISOs.
- The FTC shall collect, publish, and disseminate to the public complete information on the interchange, processing and other fees charged by each network, acquirer, processor and ISO in connection with any aspect of transactions initiated by consumers using payment cards.
- The FTC shall collect, publish, and disseminate to the public all of the rules, terms, and conditions to which a merchant or a consumer is subject under an agreement with any network, processor, acquirer or ISO directly or indirectly by contract or through a licensing arrangement for transactions indicated by consumers using payment cards.
- The FTC may prescribe regulations and issue orders requiring any electronic payment system network, and any agent, processor, or licensed member of any such network, to submit any information, including rules, agreements, and contracts, that the FTC determines to be necessary or appropriate for the FTC to meet the requirements of this act.

Have a nice day!
Paul Martaus