Credit Card Competition Act of 2022
Bill: S.4674 | Sponsor: Sen. Durbin, Richard J. (D-IL)
Policy area: Finance and Financial Sector

Summary:
Credit Card Competition Act of 2022
This bill addresses network access and competition in electronic credit transactions.
The bill generally prohibits credit card issuers from restricting the number of payment card networks on which an electronic credit transaction may be processed. Specifically, the Board of Governors of the Federal Reserve System must prohibit certain credit card issuers with assets of over $100 billion from restricting the number of networks on which credit card transactions may be processed to
Additionally, credit card issuers are prohibited from imposing certain limitations on the routing of electronic credit transactions, such as through penalties for failure to meet a specified threshold of transactions on a particular payment card network.
The board must also provide for the designation of payment card networks that pose a security risk to the United States or are owned, operated, or sponsored by a foreign state entity.

To amend the Electronic Fund Transfer Act to require the Board of 
   Governors of the Federal Reserve system to prescribe regulations 
 relating to network competition in credit card transactions, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Card Competition Act of 
2022''.

SEC. 2. COMPETITION IN CREDIT CARD TRANSACTIONS.

    (a) In General.--Section 921 of the Electronic Fund Transfer Act 
(15 U.S.C. 1693o-2) is amended--
            (1) in subsection (b)--
                    (A) by redesignating paragraphs (2), (3), and (4) 
                as paragraphs (3), (4), and (5), respectively; and
                    (B) by inserting after paragraph (1) the following:
            ``(2) Competition in credit card transactions.--
                    ``(A) No exclusive network.--
                            ``(i) In general.--Not later than 1 year 
                        after the date of enactment of the Credit Card 
                        Competition Act of 2022, the Board shall 
                        prescribe regulations providing that a covered 
                        card issuer or payment card network shall not 
                        directly or through any agent, processor, or 
                        licensed member of a payment card network, by 
                        contract, requirement, condition, penalty, 
                        technological specification, or otherwise, 
                        restrict the number of payment card networks on 
                        which an electronic credit transaction may be 
                        processed to--
                                    ``(I) 1 such network;
                                    ``(II) 2 or more such networks 
                                which are owned, controlled, or 
                                otherwise operated by--
                                            ``(aa) affiliated persons; 
                                        or
                                            ``(bb) networks affiliated 
                                        with such issuer; or
                                    ``(III) subject to clause (ii), the 
                                2 such networks that hold the 2 largest 
                                market shares with respect to the 
                                number of credit cards issued in the 
                                United States by licensed members of 
                                such networks (and enabled to be 
                                processed through such networks), as 
                                determined by the Board on the date on 
                                which the Board prescribes the 
                                regulations.
                            ``(ii) Determinations by board.--
                                    ``(I) In general.--The Board, not 
                                later than 3 years after the date on 
                                which the regulations prescribed under 
                                clause (i) take effect, and not less 
                                frequently than once every 3 years 
                                thereafter, shall determine whether the 
                                2 networks identified under clause 
                                (i)(III) have changed, as compared with 
                                the most recent such determination by 
                                the Board.
                                    ``(II) Effect of determination.--If 
                                the Board, under subclause (I), 
                                determines that the 2 networks 
                                described in clause (i)(III) have 
                                changed (as compared with the most 
                                recent such determination by the 
                                Board), clause (i)(III) shall no longer 
                                have any force or effect.
                    ``(B) No routing restrictions.--Not later than 1 
                year after the date of enactment of the Credit Card 
                Competition Act of 2022, the Board shall prescribe 
                regulations providing that a covered card issuer or 
                payment card network shall not--
                            ``(i) directly or through any agent, 
                        processor, or licensed member of the network, 
                        by contract, requirement, condition, penalty, 
                        or otherwise--
                                    ``(I) inhibit the ability of any 
                                person who accepts credit cards for 
                                payments to direct the routing of 
                                electronic credit transactions for 
                                processing over any payment card 
                                network that--
                                            ``(aa) may process such 
                                        transactions; and
                                            ``(bb) is not on the list 
                                        established by the Board under 
                                        subparagraph (D);
                                    ``(II) require any person who 
                                accepts credit cards for payments to 
                                exclusively use, for transactions 
                                associated with a particular credit 
                                card, an authentication, tokenization, 
                                or other security technology that 
                                cannot be used by all of the payment 
                                card networks that may process 
                                electronic credit transactions for that 
                                particular credit card; or
                                    ``(III) inhibit the ability of 
                                another payment card network to handle 
                                or process electronic credit 
                                transactions using an authentication, 
                                tokenization, or other security 
                                technology for the processing of those 
                                electronic credit transactions; or
                            ``(ii) impose any penalty or disadvantage, 
                        financial or otherwise, on any person for--
                                    ``(I) choosing to direct the 
                                routing of an electronic credit 
                                transaction over any payment card 
                                network on which the electronic credit 
                                transaction may be processed; or
                                    ``(II) failing to ensure that a 
                                certain number, or aggregate dollar 
                                amount, of electronic credit 
                                transactions are handled by a 
                                particular payment card network.
                    ``(C) Applicability.--The regulations prescribed 
                under subparagraphs (A) and (B) shall not apply to a 
                credit card issued in a 3-party payment system model.
                    ``(D) Designation of national security risks.--Not 
                later than 1 year after the date of enactment of the 
                Credit Card Competition Act of 2022, the Board, in 
                consultation with the Secretary of the Treasury, shall 
                prescribe regulations to establish a public list of any 
                payment card network--
                            ``(i) the processing of electronic credit 
                        transactions by which is determined by the 
                        Board to pose a risk to the national security 
                        of the United States; or
                            ``(ii) that is owned, operated, or 
                        sponsored by a foreign state entity.
                    ``(E) Definitions.--In this paragraph--
                            ``(i) the terms `card issuer' and 
                        `creditor' have the meanings given the terms in 
                        section 103 of the Truth in Lending Act (15 
                        U.S.C. 1602);
                            ``(ii) the term `covered card issuer' means 
                        a card issuer that, together with the 
                        affiliates of the card issuer, has assets of 
                        more than $100,000,000,000;
                            ``(iii) the term `credit card issued in a 
                        3-party payment system model' means a credit 
                        card issued by a card issuer that is--
                                    ``(I) the payment card network with 
                                respect to the credit card; or
                                    ``(II) under common ownership with 
                                the payment card network with respect 
                                to the credit card;
                            ``(iv) the term `electronic credit 
                        transaction'--
                                    ``(I) means a transaction in which 
                                a person uses a credit card; and
                                    ``(II) includes a transaction in 
                                which a person does not physically 
                                present a credit card for payment, 
                                including a transaction involving the 
                                entry of credit card information onto, 
                                or use of credit card information in 
                                conjunction with, a website interface 
                                or a mobile telephone application; and
                            ``(v) the term `licensed member' includes, 
                        with respect to a payment card network--
                                    ``(I) a creditor or card issuer 
                                that is authorized to issue credit 
                                cards bearing any logo of the payment 
                                card network; and
                                    ``(II) any person, including any 
                                financial institution and any person 
                                that may be referred to as an 
                                `acquirer', that is authorized to--
                                            ``(aa) screen and accept 
                                        any person into any program 
                                        under which that person may 
                                        accept, for payment for goods 
                                        or services, a credit card 
                                        bearing any logo of the payment 
                                        card network;
                                            ``(bb) process transactions 
                                        on behalf of any person who 
                                        accepts credit cards for 
                                        payments; and
                                            ``(cc) complete financial 
                                        settlement of any transaction 
                                        on behalf of a person who 
                                        accepts credit cards for 
                                        payments.''; and
            (2) in subsection (d)(1), by inserting ``, except that the 
        Bureau shall not have authority to enforce the requirements of 
        this section or any regulations prescribed by the Board under 
        this section'' after ``section 918''.
    (b) Effective Date.--The regulations prescribed by the Board of 
Governors of the Federal Reserve System under paragraph (2) of section 
921(b) of the Electronic Fund Transfer Act (15 U.S.C. 1693o-2(b)), as 
amended by subsection (a) of this section, shall take effect on the 
date that is 180 days after the date on which the Board prescribes the 
final version of those regulations.
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