As the regulatory relief battle rages in the House Banking Committee, it appears that any final bill would likely include some provisions addressing payment systems.
The surviving versions of the legislation affect card industry issues such as stored value cards, the sharing of customer account information, and credit scoring models.
To the disappointment of lobbying forces like Visa U.S.A., MasterCard International, and the American Bankers Association, provisions that would have increased consumer liability for lost and stolen credit and debit cards were dropped from the bill last week.
"We were not pleased that the unauthorized-use provisions were stricken," said William P. Binzel, MasterCard's director of government relations. "Ultimately, the burden of proof is on the financial institution."
By contrast, Ruth Susswein, executive director of Bankcard Holders of America, McLean, Va., was pleased.
"It is very good news that consumers won't be liable for fraud that they may not know existed," she said.
The two bank card associations pushed for amendments that would have, among other things, required consumers to report card fraud within a specified period of time; otherwise they would bear more of the cost of the unauthorized transactions.
Ultimately, Democratic legislators removed the provisions that would have increased cardholders' responsibility in instances of fraud.
Lamar Smith, vice president of government relations for Visa U.S.A., said the stored value card provision and the sharing of information between affiliates are the two most important pieces of the bill remaining.
Stored value cards, often based on chip technology, would be exempted from the Electronic Funds Transfer Act, which otherwise requires financial institutions to provide regular cardholder statements detailing such transactions. That 1978 law also requires that a receipt be provided for each transaction.
The financial industry has argued that debit-card-like regulation would impede development of an innovative card technology.
Unless a stored value transaction involves a financial institution account, it does not have to be noted by the company that issued the card, according to the bill.
The bill also allows various affiliates within one company to share customer account information. This means, according to Mr. Smith, "that affiliates can put all of their account information in a central repository without being subject to" the Fair Credit Reporting Act.
Less industry-friendly is the provision about credit scores, which requires lenders to defend their scoring models against fair-lending challenges.
Regulators may ask lenders to justify their credit granting procedures, particularly if there is evidence that a protected class of people is being denied credit based on a scoring method.
