Credit Card Competition Act of 2026
Summary
The Credit Card Competition Act of 2026 aims to amend the Electronic Fund Transfer Act, seeking to foster competition in credit card transactions. It directs the Federal Reserve to prescribe regulations preventing exclusive network arrangements and routing restrictions on credit cards. The bill also addresses national security concerns related to payment card networks.
Expected Effects
The act intends to diversify payment networks and give merchants more control over transaction routing. This could lead to lower transaction fees for merchants and potentially lower prices for consumers. However, it might also impact the revenue of major credit card networks and associated rewards programs.
Potential Benefits
- Increased competition among credit card networks.
- Potential reduction in transaction fees for merchants.
- Possible lower prices for consumers due to reduced merchant costs.
- Enhanced control for merchants over transaction routing.
- Mitigation of national security risks related to payment networks.
Potential Disadvantages
- Potential reduction in rewards programs for consumers.
- Possible decrease in revenue for major credit card networks.
- Increased complexity for payment processing systems.
- Potential for unintended consequences in the credit card market.
- Costs associated with implementing new regulations and technologies.
Constitutional Alignment
The bill aligns with Congress's power to regulate commerce, as granted by Article I, Section 8, Clause 3 (the Commerce Clause). The regulations prescribed by the Federal Reserve aim to prevent anti-competitive practices in interstate commerce. The Act does not appear to infringe upon any individual liberties or rights protected by the Constitution or its amendments.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).