Law and regulation

The credit card tax the Malaysian government imposed earlier this year has caused the country’s card base to drop significantly, an official at the country’s central bank tells PaymentsSource.

Richard J. Boudreau & Associates LLC, an ACA International Members’ Attorney Program member in Salem, N.H., announced that a federal jury in Detroit returned a verdict in favor of the company and two individual employees last week. ACA International first reported the decision.

Missouri Attorney General Chris Koster announced this week that his office has reached a consent judgment with Elite Financial Services Inc., a debt settlement company that allegedly misrepresented its services.



U.S. Sen Dick Durbin, D-Ill., on Dec. 22 sent a letter to Elizabeth Warren, special advisor to the secretary of the treasurer and the person responsible for establishing the newly created Consumer Financial Protection Bureau, seeking her help to protect consumers from attempts to circumvent new payment card regulations “by pushing consumers to less-regulated products such as prepaid cards.”

The Fed’s proposed new interchange rules may bring a quick end to free checking, two analysts say.

Merchant acquirers might be breathing a sigh of relief following the Federal Reserve Board’s proposal to cap debit card interchange rates at 12 cents per transaction (see story). But though the proposed rules would not directly affect them, issuer reaction might, observers say.

With so-called debit card fees poised to take a severe hit, some payments analysts say a similar attack on credit card interchange rates is inevitable.

The U.S. Department of the Treasury issued a final rule Dec. 21 to move to electronic payments instead of checks for federal benefits and nontax payments.

In the latest congressional assault on card fees, a group of Senate Democrats introduced legislation Friday that would limit the types of fees that could be charged on prepaid cards.

WASHINGTON — If you want to know why the American Bankers Association blames the Independent Community Bankers of America for undercutting the industry's lobbying on regulatory reform legislation, you have to start in Nebraska.

Contrary to expectations, the Federal Reserve Board’s draft report on debit interchange did not resolve the debate on the cost of fraud in card payments.

For Visa Inc., MasterCard Worldwide and competing payments networks, a more critical provision than interchange pricing remains unresolved in the Federal Reserve’s proposed debit rules.

ATM manufacturers and operators saw a modest bump in their stock prices Dec. 16 following the Federal Reserve Board’s release of proposed rules that would dramatically restrict the interchange fees issuers receive for most debit card purchases.

WASHINGTON — The Federal Reserve Board's proposal to restrict interchange fees on debit cards came out much tougher than expected on Thursday, causing one industry representative to dub it "horrendous" policy and spurring a stock drop at the two largest payment networks (see proposal).

Discover Financial Services is banking on a mobile future. Executives at the Riverwoods, Ill.-based company said during a Dec. 16 conference call with analysts to discuss its fiscal fourth-quarter earnings that its deal with wireless carriers AT&T Inc., T-Mobile USA Inc. and Verizon Communications Inc. will play heavily in its future.

WASHINGTON — The Federal Reserve Board is considering a 12-cent fee cap on interchange fees for debit transactions as part of new regulations to rein in merchant costs of processing payments (see proposal).

WASHINGTON – The Federal Reserve this afternoon proposed rules aimed at lowering interchange fees on debit transactions that could cap fees at 12 cents per transaction, about what the current median cost of authorization, clearance and settlement is (see proposal).

Visa Inc. and MasterCard Worldwide impose restrictive and anticompetitive rules on merchants who accept their credit cards, the Competition Bureau is alleging in Canada in a Dec. 15 application with the country’s Competition Tribunal.

The Federal Trade Commission charged three debt-relief operations with making unsubstantiated claims to lure consumers nationwide into paying thousands of dollars in upfront fees, but failing to reduce credit card debts as promised, the agency announced in early December.

WASHINGTON — For the first time in its history, the Federal Reserve Board said Friday it would host a live webcast of an upcoming open board meeting.