9-1548
ELECTRONIC FUND
TRANSFER ACT
SECTION 920—Reasonable
Fees and Rules for Payment Card Transactions
(a) Reasonable interchange transaction fees for
electronic debit transactions.
(1) Regulatory
authority over interchange transaction fees. The Board may prescribe
regulations, pursuant to section 553 of title 5, United States Code,
regarding any interchange transaction fee that an issuer may receive
or charge with respect to an electronic debit transaction, to implement
this subsection (including related definitions), and to prevent circumvention
or evasion of this subsection.
(2) Reasonable
interchange transaction fees. The amount of any interchange transaction
fee that an issuer may receive or charge with respect to an electronic
debit transaction shall be reasonable and proportional to the cost
incurred by the issuer with respect to the transaction.
(3) Rulemaking required.
(A) In general. The Board shall prescribe regulations in final form not later than
9 months after the date of enactment of the Consumer Financial Protection
Act of 2010, to establish standards for assessing whether the amount
of any interchange transaction fee described in paragraph (2) is reasonable
and proportional to the cost incurred by the issuer with respect to
the transaction.
(B) Information collection. The Board
may require any issuer (or agent of an issuer) or payment card network
to provide the Board with such information as may be necessary to
carry out the provisions of this subsection and the Board, in issuing
rules under subparagraph (A) and on at least a bi-annual basis thereafter,
shall disclose such aggregate or summary information concerning the
costs incurred, and interchange transaction fees charged or received,
by issuers or payment card networks in connection with the authorization,
clearance or settlement of electronic debit transactions as the Board
considers appropriate and in the public interest.
(4) Considerations; consultation. In prescribing regulations under
paragraph (3)(A), the Board shall—
(A) consider the functional
similarity between—
(i) electronic debit transactions; and
(ii) checking transactions
that are required within the Federal Reserve bank system to clear
at par;
(B) distinguish between—
(i) the incremental cost incurred by an issuer
for the role of the issuer in the authorization, clearance, or settlement
of a particular electronic debit transaction, which cost shall be
considered under paragraph (2); and
(ii) other costs incurred by an issuer which
are not specific to a particular electronic debit transaction, which
costs shall not be considered under paragraph (2); and
(C) consult, as appropriate,
with the Comptroller of the Currency, the Board of Directors of the
Federal Deposit Insurance Corporation, the Director of the Office
of Thrift Supervision, the National Credit Union Administration Board,
the Administrator of the Small Business Administration, and the Director
of the Bureau of Consumer Financial Protection.
(5) Adjustments to interchange transaction fees for fraud prevention
costs.
(A) Adjustments. The Board may allow for an adjustment to the fee amount received
or charged by an issuer under paragraph (2), if—
(i) such adjustment
is reasonably necessary to make allowance for costs incurred by the
issuer in preventing fraud in relation to electronic debit transactions
involving that issuer; and
(ii)
the issuer complies with the fraud-related standards established by
the Board under subparagraph (B), which standards shall—
(I) be designed to ensure that any fraud-related
adjustment of the issuer is limited to the amount described in clause
(i) and takes into account any fraud-related reimbursements (including
amounts from charge-backs) received from consumers, merchants, or
payment card networks in relation to electronic debit transactions
involving the issuer; and
(II) require issuers to take effective steps to reduce the occurrence
of, and costs from, fraud in relation to electronic debit transactions,
including through the development and implementation of cost-effective
fraud prevention technology.
(B) Rulemaking required.
(i) In general. The Board shall prescribe regulations in final form
not later than 9 months after the date of enactment of the Consumer
Financial Protection Act of 2010, to establish standards for making
adjustments under this paragraph.
(ii) Factors for
consideration. In issuing the standards and prescribing regulations
under this paragraph, the Board shall consider—
(I) the nature, type, and occurrence of fraud
in electronic debit transactions;
(II) the extent to which the occurrence of
fraud depends on whether authorization in an electronic debit transaction
is based on signature, PIN, or other means;
(III) the available and economical means
by which fraud on electronic debit transactions may be reduced;
(IV) the fraud prevention
and data security costs expended by each party involved in electronic
debit transactions (including consumers, persons who accept debit
cards as a form of payment, financial institutions, retailers and
payment card networks);
(V) the costs of fraudulent transactions absorbed by each party involved
in such transactions (including consumers, persons who accept debit
cards as a form of payment, financial institutions, retailers and
payment card networks);
(VI) the extent to which interchange transaction fees have in the
past reduced or increased incentives for parties involved in electronic
debit transactions to reduce fraud on such transactions; and
(VII) such other factors as
the Board considers appropriate.
(6) Exemption for small issuers.
(A) In general. This subsection shall not apply
to any issuer that, together with its affiliates, has assets of less
than $10,000,000,000, and the Board shall exempt such issuers from
regulations prescribed under paragraph (3)(A).
(B) Definition. For purposes of this paragraph, the term “issuer” shall be limited
to the person holding the asset account that is debited through an
electronic debit transaction.
(7) Exemption
for government-administered payment programs and reloadable prepaid
cards.
(A) In general. This subsection shall not apply to an interchange transaction fee
charged or received with respect to an electronic debit transaction
in which a person uses—
(i) a debit card or general-use prepaid card
that has been provided to a person pursuant to a Federal, State or
local government-administered payment program, in which the person
may only use the debit card or general-use prepaid card to transfer
or debit funds, monetary value, or other assets that have been provided
pursuant to such program; or
(ii) a plastic card, payment code, or device that is—
(I) linked to funds, monetary value, or assets
which are purchased or loaded on a prepaid basis;
(II) not issued or approved
for use to access or debit any account held by or for the benefit
of the card holder (other than a subaccount or other method of recording
or tracking funds purchased or loaded on the card on a prepaid basis);
(III) redeemable at multiple,
unaffiliated merchants or service providers, or automated teller machines;
(IV) used to transfer or
debit funds, monetary value, or other assets; and
(V) reloadable and not marketed or labeled
as a gift card or gift certificate.
(B) Exception. Notwithstanding subparagraph
(A), after the end of the 1-year period beginning on the effective
date provided in paragraph (9), this subsection shall apply to an
interchange transaction fee charged or received with respect to an
electronic debit transaction described in subparagraph (A)(i) in which
a person uses a general-use prepaid card, or an electronic debit transaction
described in subparagraph (A)(ii), if any of the following fees may
be charged to a person with respect to the card:
(i) A fee for an
overdraft, including a shortage of funds or a transaction processed
for an amount exceeding the account balance.
(ii) A fee imposed by the issuer for the first
withdrawal per month from an automated teller machine that is part
of the issuer’s designated automated teller machine network.
(C) Definition. For purposes of subparagraph
(B), the term “designated automated teller machine network” means
either—
(i) all automated teller machines identified
in the name of the issuer; or
(ii) any network of automated teller machines
identified by the issuer that provides reasonable and convenient access
to the issuer’s customers.
(D) Reporting. Beginning 12 months after the date of enactment of the Consumer
Financial Protection Act of 2010, the Board shall annually provide
a report to the Congress regarding—
(i) the prevalence of the
use of general-use prepaid cards in Federal, State or local government-administered
payment programs; and
(ii) the interchange transaction fees and cardholder fees charged
with respect to the use of such general-use prepaid cards.
(8) Regulatory authority over network fees.
(A) In general. The Board may prescribe regulations, pursuant to section 553 of
title 5, United States Code, regarding any network fee.
(B) Limitation. The authority under subparagraph (A) to prescribe
regulations shall be limited to regulations to ensure that—
(i) a network
fee is not used to directly or indirectly compensate an issuer with
respect to an electronic debit transaction; and
(ii) a network fee is not used to circumvent
or evade the restrictions of this subsection and regulations prescribed
under such subsection.
(C) Rulemaking
required. The Board shall prescribe regulations in final form
before the end of the 9-month period beginning on the date of the
enactment of the Consumer Financial Protection Act of 2010, to carry
out the authorities provided under subparagraph (A).
(9) Effective date. This subsection shall take effect at the end
of the 12-month period beginning on the date of the enactment of the
Consumer Financial Protection Act of 2010.
(b) Limitation on payment card network
restrictions.
(1) Prohibitions
against exclusivity arrangements.
(A) No exclusive network. The Board shall,
before the end of the 1-year period beginning on the date of the enactment
of the Consumer Financial Protection Act of 2010, prescribe regulations
providing that an issuer or payment card network shall not directly
or through any agent, procesor, or licensed member of a payment
card network, by contract, requirement, condition, penalty, or otherwise,
restrict the number of payment card networks on which an electronic
debit transaction may be processed to—
(i) 1 such network; or
(ii) 2 or more such networks
which are owned, controlled, or otherwise operated by—
(I) affiliated persons; or
(II) networks affiliated with such issuer.
(B) No routing
restrictions. The Board shall, before the end of the 1-year period
beginning on the date of the enactment of the Consumer Financial Protection
Act of 2010, prescribe regulations providing that an issuer or payment
card network shall not, directly or through any agent, processor,
or licensed member of the network, by contract, requirement, condition,
penalty, or otherwise, inhibit the ability of any person who accepts
debit cards for payments to direct the routing of electronic debit
transactions for processing over any payment card network that may
process such transactions.
(2) Limitation
on restrictions on offering discounts for use of a form of payment.
(A) In general. A payment card network shall not, directly or through any agent,
processor, or licensed member of the network, by contract, requirement,
condition, penalty, or otherwise, inhibit the ability of any person
to provide a discount or in-kind incentive for payment by the use
of cash, checks, debit cards, or credit cards to the extent that—
(i) in the case of a discount or in-kind incentive for payment by
the use of debit cards, the discount or in-kind incentive does not
differentiate on the basis of the issuer or the payment card network;
(ii) in the case of a discount
or in-kind incentive for payment by the use of credit cards, the discount
or in-kind incentive does not differentiate on the basis of the issuer
or the payment card network; and
(iii) to the extent required by Federal law
and applicable State law, such discount or in-kind incentive is offered
to all prospective buyers and disclosed clearly and conspicuously.
(B) Lawful discounts. For purposes of this
paragraph, the network may not penalize any person for the providing
of a discount that is in compliance with Federal law and applicable
State law.
(3) Limitation on restrictions on setting
transaction minimums or maximums.
(A) In general. A payment card network shall
not, directly or through any agent, processor, or licensed member
of the network, by contract, requirement, condition, penalty, or otherwise,
inhibit the ability—
(i) of any person to set a minimum dollar
value for the acceptance by that person of credit cards, to the extent
that—
(I) such minimum dollar value
does not differentiate between issuers or between payment card networks;
and
(II) such minimum
dollar value does not exceed $10.00; or
(ii) of any Federal agency or
institution of higher education to set a maximum dollar value for
the acceptance by that Federal agency or institution of higher education
of credit cards, to the extent that such maximum dollar value does
not differentiate between issuers or between payment card networks.
(B) Increase in minimum dollar amount. The
Board may, by regulation prescribed pursuant to section 553 of title
5, United States Code, increase the amount of the dollar value listed
in subparagraph (A)(i)(II).
(4) Rule of construction. No provision of this subsection shall be construed to authorize
any person—
(A) to discriminate between debit cards
within a payment card network on the basis of the issuer that issued
the debit card; or
(B) to discriminate between credit cards within a payment card network
on the basis of the issuer that issued the credit card.
(c) Definitions. For purposes of this section, the following definitions shall apply:
(1) Affiliate. The term “affiliate” means any company that controls,
is controlled by, or is under common control with another company.
(2) Debit card. The term “debit card”—
(A) means
any card, or other payment code or device, issued or approved for
use through a payment card network to debit an asset account (regardless
of the purpose for which the account is established), whether authorization
is based on signature, PIN, or other means;
(B) includes a general-use prepaid card,
as that term is defined in section 915(a)(2)(A); and
(C) does not include paper checks.
(3) Credit card. The term “credit card” has
the same meaning as in section 103 of the Truth in Lending Act.
(4) Discount. The term “discount”—
(A) means
a reduction made from the price that customers are informed is the
regular price; and
(B) does not include any means of increasing the price that customers
are informed is the regular price.
(5) Electronic
debit transaction. The term “electronic debit transaction” means
a transaction in which a person uses a debit card.
(6) Federal agency. The term “Federal agency” means—
(A) an agency (as defined
in section 101 of title 31, United States Code); and
(B) a Government corporation (as defined
in section 103 of title 5, United States Code).
(7) Institution of higher education. The term “institution of higher
education” has the same meaning as in 101 and 102 of the Higher Education
Act of 1965 (20 U.S.C. 1001, 1002).
(8) Interchange
transaction fee. The term “interchange transaction fee” means
any fee established, charged or received by a payment card network
for the purpose of compensating an issuer for its involvement in an
electronic debit transaction.
(9) Issuer. The term “issuer” means any person who issues a debit card, or credit
card, or the agent of such person with respect to such card.
(10) Network fee. The term “network fee” means any fee charged and
received by a payment card network with respect to an electronic debit
transaction, other than an interchange transaction fee.
(11) Payment card network. The term “payment card network” means
an entity that directly, or through licensed members, processors,
or agents, provides the proprietary services, infrastructure, and
software that route information and data to conduct debit card or
credit card transaction authorization, clearance, and settlement,
and that a person uses in order to accept as a form of payment a brand
of debit card, credit card or other device that may be used to carry
out debit or credit transactions.
(d) Enforcement.
(1) In general. Compliance with the requirements imposed under this section shall
be enforced under section 918.
(2) Exception. Sections 916 and 917 shall not apply with respect to this section
or the requirements imposed pursuant to this section.
[15 USC 1693o-2.
As added by act of July 21, 2010 (124 Stat. 2068).]
