Law and regulation

Starting Jan. 1, Vermont merchants will be able to set spending minimums for debit and credit card payments under a bill that became law last week despite concerns from the state's governor.

Payments-industry lobbyists late this week began the uphill effort of trying to eliminate an amendment from the financial-reform bill the Senate passed May 20 that would enable the Federal Reserve to control debit card interchange rates.

After three weeks of contentious debate, the Senate approved landmark financial reform legislation 59 to 39 late Thursday.

New York City Mayor Michael R. Bloomberg and Department of Consumer Affairs (DCA) Commissioner Jonathan Mintz this week announced new collection regulations designed to stop abusive collection tactics.

WASHINGTON — The Senate overwhelmingly rejected a measure from Sen. Sheldon Whitehouse late Wednesday that would require national banks to offer credit based on the interest rate limits in cardholders' states.

New York Attorney General Andrew Cuomo filed a lawsuit today against three national lenders and their affiliated companies for targeting members of the military by selling them high-priced electronics, then luring them into illegal credit plans.

Interchange fees are the largest component of merchant card-acceptance fees, and the merchant lobby has been waging an aggressive political campaign to get government to curb them.

WASHINGTON — Just days after the surprise passage of an amendment to regulate interchange, bankers are bracing for the possible addition of an even stronger measure that would hold them to the interest rate limit in the cardholder's state.

The U.S. Department of Justice has indicted a former supervisor at collection agency GC Services on charges she tampered with checks sent by consumers, directed them to a personal bank account and forged electronic records.

The Reserve Bank of India should set the maximum annual interest rates banks may charge their credit cardholders, a parliamentary committee is suggesting in a new report.

One of the roughly 140 proposed amendments to the financial reform legislation could have serious implications for credit card issuers, but so far the proposal does not seem to have much of a toehold.

Senate Majority Whip Dick Durbin, D-Ill. on May 6 introduced three interchange-related amendments to the Senate’s financial-reform bill, prompting swift criticism from the payments industry.

A lawsuit filed by New York Attorney General Andrew Cuomo's office claims attorney John P. Nicolia sold a collection agency the use of his name and his law firm's name in 2008 and 2009, which the agency then used to threaten bogus legal action against consumers across the U.S. Nicolia, of Williamsville, N.Y., received a total of $141,000 for selling his name, according to Cuomo's office.

Major U.S. banks’ credit card-issuing units brought in billions in interest income during the fourth quarter of 2009, led by JPMorgan Chase & Co.’s Chase Bank USA, which earned $8.43 billion in credit card interest income during the period. Credit card interest income accounted for 87% of the unit’s total interest income of $9.7 billion, which also includes commercial, industrial, installment and some student loans. Mortgage loans are handled by another business unit.

Vermont merchants are a step closer to being able to set minimum purchase amounts for card payments after the state's Senate passed a bill Tuesday giving retailers more control over card acceptance.

The Federal Trade Commission has closed a mortgage foreclosure operation that promoted bogus loan modification and foreclosure relief services, officials announced today. The FTC also imposed a $12 million judgment against the operation.

Four witnesses testifying April 28 before the U.S. House Judiciary Committee on credit card interchange regulation agreed on one thing: A handful of the largest banks benefit most from interchange. And the potential effect of interchange-rate regulation on smaller community banks and credit unions, which struggle to compete against the giants, is murky.

The U.S. House Judiciary Committee is resurrecting discussion about credit card interchange regulation with a hearing scheduled for April 28 on Capitol Hill. The hearing before the full committee will focus on the “Credit Card Fair Fee Act,” which committee member John Conyers, D-Mich., introduced in 2008 and 2009.

The Single Euro Payments Area, an initiative the European banking industry launched in 2002 to link European Union and other euro-based countries’ separate national payment systems into a standardized system, remains a work in progress. And not everyone believes the European Payments Council, which is responsible for the initiative that has seen several delays already, can complete the task by December 2012, as the European Commission has proposed.

Federal Trade Commission officials testified yesterday before the U.S. Senate Committee on Commerce, Science, and Transportation that the FTC will continue its stepped-up efforts to protect financially strapped consumers from deceptive and abusive debt relief scams.