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 among credit card networks. It directs the Federal Reserve to establish regulations preventing exclusive network arrangements and routing restrictions on credit card transactions. The bill also mandates the creation of a public list identifying payment card networks posing national security risks.
Expected Effects
If enacted, the bill would likely lead to changes in how credit card transactions are processed, potentially reducing costs for merchants. Consumers might see some of these savings passed on, but the impact is uncertain. The Federal Reserve would gain increased regulatory authority over credit card networks.
Potential Benefits
- Potentially lower transaction fees for merchants.
- Increased competition among credit card networks.
- Greater flexibility for merchants in routing credit card transactions.
- Enhanced security measures through identification of risky networks.
- Potential for innovation in payment processing technologies.
Most Benefited Areas:
Potential Disadvantages
- Possible increased complexity for consumers in understanding payment options.
- Potential for reduced rewards programs if interchange fees decrease.
- Risk of unintended consequences from regulatory intervention.
- Potential for increased costs for smaller card issuers.
- Uncertainty regarding the actual savings passed on to consumers.
Constitutional Alignment
The bill's alignment with the Constitution is primarily based on Congress's power to regulate interstate commerce (Article I, Section 8, Clause 3). The Act aims to regulate credit card transactions, which fall under the umbrella of economic activity that crosses state lines. The delegation of regulatory authority to the Federal Reserve is also consistent with established constitutional principles.
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).