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Two recent developments are sending a message to credit card issuers that the regulatory and political winds are not blowing in their favor.

Rohit Chopra, director of the Consumer Financial Protection Bureau (CFPB), on June 22 issued an advance notice of proposed rulemaking to assess if late fees charged by credit card issuers are “reasonable and proportional,” as required by the Credit Card Accountability Responsibility and Disclosure (CARD) Act.

Chopra’s notice came weeks after longtime card industry adversary Sen. Richard Durbin chaired a Judiciary Committee meeting exploring “excessive interchange fees.” While Durbin advocated for reforms, some of his suggestions would set the industry back by decades, likely ending the ability of small banks and credit unions to offer credit cards and directly harming consumers.

Though the outcome is uncertain, the trajectory is clear. Now is the time for a refresher course on the current rules of the road and for issuers to prepare for any potential changes arising during this period of heightened scrutiny.

Though the pandemic caused a slowdown in banking industry consolidations, a recent surge of M&A activity is already breaking records. New data published by S&P Global shows M&A transactions delayed by the pandemic are not only pent-up in numbers, but they’re also getting bigger - extending to regional and super-regional banks holding $10 billion to $1 trillion in assets.

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.

Let’s begin by stating the obvious: this will not be a normal election season. As it has for so many aspects of everyday life, COVID has radically altered the basics of voting- from a huge uptick in advance and absentee ballots to the near-elimination of traditional campaign rallies.

We know that markets hate uncertainty – and that’s one thing in ample supply these days. Uncertainty creates hesitancy to invest in initiatives that could be upended based on the election outcome. This is especially problematic in our current environment, with so many critical issues clamoring to be addressed.

When we weighed in on FIS’ March acquisition of Worldpay, I predicted that a TSYS/Global Payments combination might be in the cards. Two months later, a “merger of equals” announcement between those leading players has me wishing I had spent a bit more time in Vegas.

The payment processing landscape has shifted dramatically in the past four months, with four of the major acquirer/processors making moves this year (Fiserv kicked off the action by joining forces with First Data in January). Traditional payments providers are pursuing greater scale and a broader suite of services in their quest to achieve profitable growth and stave off competition from fintechs entering the market with disruptive models.

It seems like only yesterday that the payments world was upended by news of Fiserv’s $22 billion acquisition of First Data. Actually, it was two months ago almost to the day.  We weighed in at the time on the deal’s implications for financial institutions, and speculation quickly turned to how Fiserv’s key competitor FIS might react.

The payments world woke to a jolt last Wednesday with the news that Fiserv had announced an agreement to acquire First Data in a $22 billion stock transaction, creating a fintech mega-firm. Most of the early coverage focused on the deal’s financial aspects, and on private equity firm KKR coming closer to finally turning the page on its massive 2007 buyout of First Data. However, we’d like to focus on the implications for customers of this new entity - particularly the financial institutions that comprise the bulk of its business.

Numeric milestones can be great opportunities to celebrate achievement and build team morale. Asset growth is usually a sign of health and prosperity, and attaining thresholds like $1 billion or $5 billion in assets are certainly momentous occasions for many financial institutions. Reaching $10 billion, however, can bring mixed blessings.

(Hint: It’s Not Just About Price)

Obviously, every financial institution (FI) wants to get the best possible deal from their service providers. The definition of “best” can vary markedly by FI, however. We’ve found that before entering the vendor contract negotiation process, a cross-functional team is well advised to invest the time to determine what it most wants from the relationship.

Not that they ever were simple, but there has certainly been a notable uptick in the complexity of legal agreements between financial institutions (FIs) and service providers recently.

The driving factors behind this trend are logical­, with the current regulatory environment requiring more aspects of vendor contract relationships to be formalized. Particularly where service providers have access to customer data or support critical operations, enhanced regulatory scrutiny of third-party obligations creates added motivation for both FIs and vendors to limit their exposure. Documenting each party’s responsibilities in detail may help, but in the event of an issue, the hard truth is that customers will look to their FI for resolution, not a back-office provider whose name they don’t recognize.