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SRM Perspectives on Key Industry Trends

Reg II 2.0 Revealed: A Summary of the Fed’s Final Guidance

Posted by Myron Schwarcz and Keith Ash on Oct 4, 2022 9:24:34 AM

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It has been almost a year and a half since the Fed had requested public comment on a “non-substantive” proposed amendment to Regulation II that would 1.) specify that the prohibition on network exclusivity applies to card-not-present debit card transactions, 2.) clarify the responsibility of the issuer to enable at least two unaffiliated networks to comply with the prohibition on network exclusivity, and 3.) standardize and explain the use of certain terminology. The proposal was anything but non-substantive and would have fundamentally altered issuers’ compliance obligations under Durbin. The Fed received more than 2,750 comments, and it has taken nearly a year since the comment period was completed to receive a final ruling. The ruling has finally arrived.

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Topics: Debit Card Interchange, Durbin Amendment, Card Networks, Federal Reserve, regulation II, debit card issuers

The Latest Evolution in the Battle to Regulate Payments

Posted by Myron Schwarcz on Apr 19, 2021 8:00:00 AM

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The business world is awash in trade groups and industry associations, but a new player's recent formation deserves special attention. The creation of the Payments Leadership Council (PLC) marks a significant milestone, one with the potential to shift the dynamic in the ongoing tug-of-war impacting card payments systems regulation.

The PLC brings together the CEOs of the four major card networks (Mastercard, Visa, American Express, and Discover) as well as those of the "Big Three" payment processors (FIS, Fiserv, and Global Payments). Equally notable is the PLC's appointment of Raj Date as its Founding Director. Date's past experience as Deputy Director of the Consumer Financial Protection Bureau – where he played a central role in the agency's launch – is a clear signal of the PLC's intent to engage more deeply in legislative corridors. Recent events demonstrate why this is a savvy move.

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Topics: Payments Leadership Council, Fed Interchange Fees, Payments Regulation, Card Networks, Major Payments Processors

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