Bill Overview
Title: Credit Card Competition Act of 2022
Description: This bill addresses network access and competition in electronic credit transactions. The bill generally prohibits credit card issuers from restricting the number of payment card networks on which an electronic credit transaction may be processed. Specifically, the Board of Governors of the Federal Reserve System must prohibit certain credit card issuers with assets of over $100 billion from restricting the number of networks on which credit card transactions may be processed to one network, two or more networks operated by affiliated networks or persons, or the two networks with the largest market share of credit cards issued. Additionally, credit card issuers are prohibited from imposing certain limitations on the routing of electronic credit transactions, such as through penalties for failure to meet a specified threshold of transactions on a particular payment card network. The board must also provide for the designation of payment card networks that pose a security risk to the United States or are owned, operated, or sponsored by a foreign state entity.
Sponsors: Sen. Durbin, Richard J. [D-IL]
Target Audience
Population: People engaging in electronic credit card transactions globally
Estimated Size: 257000000
- The bill focuses on network access for electronic credit transactions, impacting all individuals engaging in credit card transactions.
- Consumers will benefit from increased competition which may lead to lower fees and more payment options.
- U.S. credit card holders may experience changes in transaction processing networks resulting in potential cost savings.
- Credit card issuers with over $100 billion in assets will be directly affected by having to accommodate multiple networks.
- Merchants may also benefit from reduced transaction costs due to increased network competition.
- Consumers in countries with similar credit card market structures might be indirectly impacted if similar legislation is considered.
Reasoning
- Targeting a wide range of U.S. consumers, the Credit Card Competition Act aims to ameliorate the transaction experience by promoting competition. The bill is predicted to have diverse impacts across the demographic due to variations in credit card usage, geographic differences in network services, and varying degrees of reliance on credit card transactions.
- Most consumers will observe a benefit through reduced transaction fees and increased network options, potentially improving economic efficiencies and consumer satisfaction.
- Larger credit card companies might resist initial implementation, affecting related services temporarily. Overall, the well-being improvements are expected to be gradual as market adjustments take effect.
- The budget constraints suggest most of the funding will go toward regulation enforcement, minimal subsidies to incentivize network adaptation among companies, and possible consumer education campaigns.
- Merchants may experience direct benefits from reduced costs but their ability to pass these savings directly to consumers will differ.
- Variability in consumer perceptions of well-being improvement may depend on the visibility of these changes and individual spending habits.
Simulated Interviews
Software Engineer (San Francisco, CA)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 15/20
Statement of Opinion:
- I think this policy will definitely help by reducing transaction costs.
- Higher competition might lead to better services from providers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Small Business Owner (Austin, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- Transaction fees can really add up, any reduction would be welcome.
- I'd like to see how this policy actually translates to lower costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Freelance Graphic Designer (New York, NY)
Age: 28 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 7.0 years
Commonness: 8/20
Statement of Opinion:
- I use my credit card for most transactions, including international.
- Depending on the networks and costs, this could either be great or chaotic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Retired Teacher (Kansas City, MO)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 10/20
Statement of Opinion:
- I might not see the direct benefits, but lower fees are good.
- As long as the policy doesn't mean new complications, I'm supportive.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
College Student (Los Angeles, CA)
Age: 22 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 18/20
Statement of Opinion:
- I'm all for reducing costs wherever I can.
- This sounds like it might help, but I need more info on how.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 8 | 5 |
Bank Executive (Chicago, IL)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 6.0 years
Commonness: 6/20
Statement of Opinion:
- Managing multiple networks could be challenging initially, but adaptable.
- I believe in the competitiveness driving better services for our customers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Digital Marketing Specialist (Miami, FL)
Age: 30 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 14/20
Statement of Opinion:
- I'm in favor of increased competition in services I use daily.
- If this consolidates benefits on my cards, count me in.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Data Scientist (Seattle, WA)
Age: 39 | Gender: other
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 9/20
Statement of Opinion:
- In principle, the competition sounds good, but the execution is key.
- Interested to see data on changes post-implementation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 9 | 7 |
Accountant (Atlanta, GA)
Age: 56 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- Rising transaction fees have been a concern for our clients.
- This policy could potentially help our budget significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 9 | 5 |
Supply Chain Manager (Phoenix, AZ)
Age: 40 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- This could simplify corporate expense management if fees are lower.
- Would love to explore more payment network options.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Cost Estimates
Year 1: $500000000 (Low: $300000000, High: $800000000)
Year 2: $300000000 (Low: $200000000, High: $600000000)
Year 3: $300000000 (Low: $200000000, High: $600000000)
Year 5: $250000000 (Low: $150000000, High: $500000000)
Year 10: $200000000 (Low: $100000000, High: $400000000)
Year 100: $10000000 (Low: $5000000, High: $20000000)
Key Considerations
- The bill aims to promote competition, which could have wide-ranging effects on both issuers and consumers.
- Implementation costs could be substantial initially, but long-term benefits may outweigh these through enhanced competition and efficiency.
- Security considerations must be addressed to mitigate risks from network diversification.