- Briefing Room
- Consumer Engagement
- Commerce 3.0
The Credit Card Accountability and Disclosure Act, signed into law in May 2009, provides an extensive set of don’ts and do’s for the card industry. It has led to sweeping changes in business practices and pricing that continue to have widespread ramifications for the card issuers, consumers, and small businesses.
The Federal Reserve Board is in charge of regulating the interchange fees that issuers can receive for cards linked to asset accounts such as DDAs under the Dodd-Frank Act which also provides for other changes in the extent to which merchants can discriminate among networks and payment methods.
The Consumer Financial Protection Board is an independent agency within the Federal Reserve Board and run by a director with considerable powers to regulate consumer financial services products. President Obama has nominated former Ohio AG Richard Cordray to be its leader.
Interchange Fees: The Economics and Regulation of What Merchants Pay for Cards
Interchange fees have become increasingly controversial. These fees constitute the bulk of the cost that merchants incur for taking cards because most consumers pay with a card from a four-party system that assesses these fees. The total interchange fees paid by merchants have increased dramatically as consumers have switched to electronic payments. Merchants have complained, have filed lawsuits, and have lobbied governments to do something about this.