Legal and Regulatory Developments

SPOTLIGHT: Durbin to Keep Pushing Card Bill
Payments Dive – April 28, 2025

Sen. Dick Durbin is retiring, but that doesn’t mean he’s done with credit card reform efforts. The Illinois Democrat announced last week that he wouldn’t seek re-election next year and his four-decade congressional career will end in January 2027.

Still, he plans to use some of his dwindling days in the Senate to continue a crusade for the Credit Card Competition Act. A spokesperson for his office confirmed that intent by email on Thursday.

That’s the piece of legislation that would force bank card issuers to ensure that credit card processing systems always make a network other than Visa and Mastercard available to retailers, restaurants and other merchants. It would be no small change, given that Visa and Mastercard handle about 87% of all transactions when consumers swipe their cards, according to industry research firm Nilson Report. . . .

Bill to Curb Credit Card ‘Swipe Fees’ Put On Hold in Colorado Senate
Colorado Politics – April 29, 2025

The Senate sponsors of a bill that sought to rein in “swipe fees” imposed by credit card companies on taxes and tips are postponing the measure until next session. The delay will give sponsors more time to communicate directly with stakeholders to ensure everybody’s on board.

House Bill 1282 — sponsored by Reps. William Lindstedt, D-Broomfield, and Max Brooks, R-Castle Rock and Sens. Barbara Kirkmeyer, R-Brighton, and Lindsey Daugherty, D-Arvada — would bar credit card networks from charging businesses for “swipe fees.” These fees, also known as interchange or transaction fees, cover expenses like fraud prevention, bad debt and rewards programs.

Swipe fees can account for about 2% to 4% of the total cost of a tab. . . .

DC Circ. Restores Ban on CFPB Mass Layoffs Amid Appeal
Law360 – April 28, 2025 (subscription required)

A D.C. Circuit panel said Monday that the Consumer Financial Protection Bureau must refrain for now from mass employee firings, backtracking from a prior decision that the Trump administration had used to attempt a now-suspended layoff of nearly all the agency’s staff.

In a 2-1 order, the three-judge panel canceled its partial stay of U.S. District Judge Amy Berman Jackson’s blanket ban on CFPB layoffs, which she had instituted last month as part of a broader preliminary injunction barring the Trump administration from shuttering the agency.

The CFPB and its acting Director Russell Vought, a Trump appointee, are appealing the injunction, which the National Treasury Employees Union and other plaintiffs won in a suit to avert what they allege is the agency’s illegal dismantling under President Donald Trump. . . .

US Bank Regulators Pull Back Guardrails on Bank Crypto Activities
Reuters – April 25, 2025

U.S. banking regulators announced on Thursday they were pulling back several documents that urge banks to show caution when dabbling in cryptocurrency and related activities.

The Federal Reserve said it was withdrawing a pair of supervisory letters stipulating that banks should seek advance approval from regulators before engaging in crypto-asset and stablecoin activities.

In addition, the Fed joined the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency in withdrawing a pair of 2023 statements urging banks to be vigilant around crypto-related risks. . . .

Illinois AG, Durbin Defend State Card Fee Law
Payments Dive – April 25, 2025

Banks and credit unions seeking to block an Illinois law banning interchange fees on taxes and tips are misreading U.S. banking laws, argued the state’s attorney general, a coalition of merchants, and U.S. Senator Richard Durbin in briefs defending the state’s fee law.

Illinois Attorney General Kwame Raoul filed motions Wednesday opposing the banks’ bid for summary judgment and requesting that U.S. District Judge Virginia Kendall instead grant the AG summary judgment.

Durbin, who authored the Durbin Amendment to cap debit card fees, filed his second amicus brief in six months Wednesday in a federal lawsuit banks brought last year to block a 2024 Illinois law that bans card interchange fees on the sales tax and gratuity portions of card transactions. . . .

Industry Developments

SPOTLIGHT: Digital Wallets Fall Down on Fraud Protection and Data Minimization, Consumer Reports Finds
Digital Transactions News – April 25, 2025

Digital wallets provide a variety of benefits to consumers, including convenience speed, security, and record keeping, but they also pose risks for users and stand to be improved in several areas, says a study from Consumers Reports.

Consumers Reports evaluated six wallets—Apple Pay, Cash App, Google Pay, PayPal, Samsung Pay, and Venmo—from May 2024 through March. The evaluation consisted of consumer research, documentation review, user interface reviews, technical product tests, and direct engagement with the companies.

Among the reports’ key findings is that fraud monitoring and liability protection vary among wallet providers. The study also found that wallet providers’ fraud and liability protection may not be clear to users. That is an issue for consumers, as 76% of digital-wallet users in the United States use one or more wallets, while 29% use them at least once a week, and 24% use them once or more a month, Consumers Reports says. . . .

Visa and Mastercard Unveil AI-Powered Shopping
TechCrunch – April 30, 2025

Artificial intelligence is not just infiltrating the startup world. Now credit card giants Visa and Mastercard are getting into the AI game. Visa announced on Wednesday “Intelligent Commerce,” which it says enables AI “to find and buy.”

AI agents will be able to shop and make purchases on behalf of consumers, based on preselected preferences.

In a statement, Visa chief product and strategy officer Jack Forestell said: “Each consumer sets the limits, and Visa helps manage the rest.” . . .

Banks Rush to Promote Instant Payments as RTP Crosses Billion-Transaction Mark
PYMNTS – April 28, 2025

Roughly seven and a half years after The Clearing House (TCH) launched its RTP® network — the first new U.S. payments infrastructure in four decades — 24/7 instant transactions are finding wide embrace.

Joint research from PYMNTS Intelligence and TCH found that nearly all banks plan to adopt real-time payments capabilities within two years, and 62% of financial institutions (FIs) are already connected. In February, the RTP network crossed its 1 billion payment milestone.

James Colassano, senior vice president of RTP Business Product Management at The Clearing House, said banks are gearing up to meet the demands of their enterprise clients and a variety of emerging and yet-to-be-envisioned use cases. Getting to must-have status will take time, but 93% of the banks that have moved into the real-time realm have said such offerings improve customer loyalty and engagement. . . .

Early Warning Says Zelle Is Gaining Popularity With Small Businesses
Digital Transactions News – April 28, 2025

Zelle, the peer-to-peer payments network operated by Early Warning Services LLC, continues to make steady inroads with small businesses, according to data released early Monday by Early Warning.

About 7 million small businesses are enrolled in the network to make and receive payments, while the use of Zelle by consumers for paying small businesses has tripled the past three years, the network revealed in its first-ever small-business report. In addition, Zelle is also proving to be popular with gig workers, as 3-to-4 million individuals are using Zelle to receive payments tied to independent or self-directed work, Scottsdale, Ariz.-based Early Warning says.

“Zelle is more of a household name than ever among small businesses, because it is a fast, reliable, bank-initiated payment for which there are a lot of use cases,” says Denise Leonhard, general manager of Zelle. . . .

Read Payments News Update – May 2, 2025 at constantinecannon.com