[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6248 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6248

   To amend the Truth in Lending Act to prohibit unfair practices in 
      electronic payment system networks, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 11, 2008

Mr. Welch of Vermont (for himself, Mr. Ellison, and Mr. Braley of Iowa) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL


 
   To amend the Truth in Lending Act to prohibit unfair practices in 
      electronic payment system networks, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Card Interchange Fees Act of 
2008''.

SEC. 2. PROHIBITION ON CERTAIN UNFAIR CREDIT AND FUND TRANSFER 
              PRACTICES.

    (a) In General.--The Truth in Lending Act (15 U.S.C. 1601 et seq.) 
is amended by adding at the end the following new chapter:

  ``CHAPTER 6--PROHIBITION ON UNFAIR PRACTICES IN ELECTRONIC PAYMENT 
                            SYSTEM NETWORKS

``Sec. 191. Definitions.
``Sec. 192. Additional charges on merchants and consumers for premium 
                            payment cards prohibited.
``Sec. 193. Certain creditor or credit card network-imposed 
                            restrictions on merchants prohibited.
``Sec. 194. Fair and transparent transactions.
``Sec. 195. Enforcement.

``SEC. 191. DEFINITIONS.

    ``For purposes of this title, the following definitions shall 
apply:
            ``(1) Charge card.--The term charge card has the same 
        meaning as in section 127(c)(4)(E).
            ``(2) Debit card.--The term `debit card' means any card or 
        other device issued by a financial institution (as defined in 
        section 903(8)) to a consumer for use in initiating electronic 
        fund transfers (as defined in section 903(6)) from the account 
        of the consumer at such financial institution for the purpose 
        of transferring money between accounts or obtaining money, 
        property, labor, or services.
            ``(3) Electronic payment system network.--The term 
        `electronic payment system network' means a network that 
        provides, through licensed members, processors, or agents--
                    ``(A) for the issuance of payment cards (by credit 
                card issuers in the case of a credit card, charge card 
                issuers in the case of a charge card, or financial 
                institutions (as defined in section 903(8)) in the case 
                of debit cards) bearing any logo of the network;
                    ``(B) the proprietary services and infrastructure 
                that route information and data to facilitate 
                transaction authorization, clearance, and settlement 
                that merchants must access in order to accept payment 
                cards bearing any logo of the network as payment for 
                goods and services; and
                    ``(C) for the screening and acceptance of merchants 
                into the network in order to allow such merchants to 
                accept payment cards bearing any logo of the network as 
                payment for goods and services.
            ``(4) Licensed member.--The term `licenced member', in 
        connection with any electronic payment system network, 
        includes--
                    ``(A) any creditor or charge card issuer that is 
                authorized to issue credit cards or charge cards 
                bearing any logo of the network;
                    ``(B) any financial institution (as defined in 
                section 903(8)) that is authorized to issue debit cards 
                to consumers who maintain accounts at such institution; 
                and
                    ``(C) any person, including any financial 
                institution, on occasion referred to as an `acquirer' 
                that is authorized--
                            ``(i) to screen and accept merchants into 
                        any program under which any payment card 
                        bearing any logo of such network may be 
                        accepted by the merchant for payment for goods 
                        or services;
                            ``(ii) to process transactions on behalf of 
                        any such merchant for payment; and
                            ``(iii) to complete financial settlement of 
                        any such transaction on behalf of such 
                        merchant.
            ``(5) Merchant.--The term `merchant' means any person in 
        the business of selling or providing any good or service for 
        consideration.
            ``(6) Payment card.--The term `payment card' means a credit 
        card , a charge card, or a debit card.

``SEC. 192. ADDITIONAL CHARGES ON MERCHANTS AND CONSUMERS FOR PREMIUM 
              PAYMENT CARDS PROHIBITED.

    ``(a) In General.--An electronic payment system network may not, 
directly or through any agent, processor, or licensed member of the 
network, require or permit any merchant to pay any interchange, 
processing, or other fee in connection with any payment card 
transaction initiated through a premium payment card in any amount in 
excess of the amount of any such interchange, processing, or other fee 
that would be imposed in connection with such payment card transactions 
if initiated through a nonpremium payment card.
    ``(b) Premium Definition.--For purposes of subsection (a), the 
following definitions shall apply:
            ``(1) Premium payment card.--The term `premium payment 
        card' means a payment card that provides rewards or other 
        cardholder benefits or services for the use of the card other 
        than those benefits offered to any customer within the 
        electronic payment system network.
            ``(2) Nonpremium payment card.--The term `nonpremium 
        payment card' means a payment card bearing any logo of an 
        electronic payment system network that is not a premium payment 
        card.

``SEC. 193. CERTAIN CREDITOR OR CREDIT CARD NETWORK-IMPOSED 
              RESTRICTIONS ON MERCHANTS PROHIBITED.

    ``(a) Pricing Display Restrictions.--With respect to any credit 
card which may be used for extensions of credit through an electronic 
payment system network in connection with sales transactions in which 
the merchant is a person other than the card issuer, the electronic 
payment system network may not, directly or through any agent, 
processor, or licensed member of the network, by contract, or 
otherwise, restrict the merchant's discretion as to how to display or 
advertise the merchant's prices.
    ``(b) Honor All Cards Rule.--An electronic payment system network 
may not, directly or through any agent, processor, or licensed member 
of the network, prohibit any merchant that otherwise accepts payment 
cards bearing any logo of the network from refusing to accept any 
particular type of card due to its cost, except that the seller may be 
prohibited from refusing to accept a payment card issued by a 
particular creditor or financial institution without respect to any 
cost differences.
    ``(c) Steering Consumers.--An electronic payment system network may 
not, directly or through any agent, processor, or licensed member of 
the network, by contract, or otherwise, inhibit the ability of any 
merchant to direct consumers to the merchant's preferred form of 
payment.
    ``(d) Single Entity Rule.--An electronic payment system network may 
not, directly or through any agent, processor, or licensed member of 
the network, by contract, or otherwise, require any merchant to accept 
payment cards at 1 or more business locations in order to be able to 
accept payment cards at another business location.
    ``(e) Chargebacks for Transactions on Certain POS Terminals That 
Exceed the Allowable Amount on Such Devices.--An electronic payment 
system network may not, directly or through any agent, processor, or 
licensed member of the network, by contract, or otherwise, allow or 
require a chargeback to any merchant for any payment involving any 
payment and transfer initiated by the consumer at a point-of-sale 
terminal operated by the merchant on the basis that the amount of the 
transaction exceeded any preauthorized or predetermined amount for such 
terminal.
    ``(f) Merchants Permitted To Establish Minimum or Maximum Amounts 
for Payment by Payment Cards.--An electronic payment system network may 
not, directly or through any agent, processor, or licensed member of 
the network, by contract, or otherwise, prohibit any merchant from 
setting any maximum amount or minimum amount for the use of a payment 
card bearing any logo of such network by a consumer to pay for a 
transaction with such merchant.
    ``(g) Restrictions on Network Routing Prohibited.--An electronic 
payment system network may not, directly or through any agent, 
processor, or licensed member of the network, by contract, or 
otherwise, prohibit any merchant from directing the routing of payment 
card transactions for processing in the way chosen by the merchant.
    ``(h) Fees for Failing To Provide a Particular Number of 
Transactions Prohibited.--An electronic payment system network may not, 
directly or through any agent, processor, or licensed member of the 
network, by contract, or otherwise, impose any fee on any merchant for 
the failure of the merchant to meet any minimum number of transactions 
in which the consumers pay for such transactions using a payment card 
bearing any logo of such network.

``SEC. 194. FAIR AND TRANSPARENT TRANSACTIONS.

    ``(a) Disclosure of Contract Terms.--An electronic payment system 
network, and any agent, processor, or licensed member of the network, 
may not establish or maintain, directly or indirectly by contract or 
through a licensing arrangement, any agreement with a merchant, unless 
the network, agent, processor, or licensed member has made available to 
the merchant all of the rules, terms, and conditions to which such 
merchant will be bound under such agreement, including the complete 
operating rules of the relevant payment system using payment cards 
bearing any logo of such network, without restrictions on the 
merchant's use of any such information.
    ``(b) Review of Rules, Terms, and Agreements.--The Federal Trade 
Commission shall--
            ``(1) prescribe regulations to--
                    ``(A) ensure that all of the rules, terms, and 
                conditions to which a merchant or consumer is subject 
                under an agreement with an electronic payment system 
                network, or any agent, processor, or licensed member of 
                the network, directly or indirectly, by contract or 
                through a licensing arrangement, are not unfair or 
                deceptive to consumers and merchants and are not 
                anticompetitive; and
                    ``(B) prohibit any unfair or deceptive act or 
                practice or anticompetitive act or practice that may 
                otherwise be permitted under or result from any rule, 
                term, or condition described in subparagraph (A); and
            ``(2) regularly review all of the rules, terms, and 
        conditions described in paragraph (1)(A) established by each 
        electronic payment system network, or any agent, processor, or 
        licensed member of the network.
    ``(c) Interchange and Other Fees.--
            ``(1) Collection and dissemination of information.--The 
        Board shall collect, publish, and disseminate to the public--
                    ``(A) complete information on the interchange, 
                processing and other fees charged by each electronic 
                payment system network, or any agent, processor, or 
                licensed member of the network, in connection with any 
                aspect of transactions initiated by consumers using 
                payment cards bearing any logo of such network, 
                including fees imposed by the payment card issuer in 
                connection with any such transaction; and
                    ``(B) all of the rules, terms, and conditions to 
                which a merchant or a consumer is subject under an 
                agreement with an electronic payment system network, or 
                any agent, processor, or licensed member of the 
                network, directly or indirectly by contract or through 
                a licensing arrangement for transactions indicated by 
                consumers using payment cards bearing any logo of such 
                network.
            ``(2) Regulations.--For purposes of this subsection, the 
        Board may prescribe regulations and issue orders requiring any 
        electronic payment system network, and any agent, processor, or 
        licensed member of any such network, to submit any information, 
        including rules, agreements, and contracts, that the Board 
        determines to be necessary or appropriate for the Board to meet 
        the requirements of paragraph (1).

``SEC. 195. ENFORCEMENT.

    ``Subsections (a), (b), and (h) of section 130 shall be applied for 
purposes of this chapter by substituting the term `an electronic 
payment system network, or any agent, processor, or licensed member of 
any such network' for `creditor' each place such term appears in such 
subsections.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 127(a) of the Truth in Lending Act (U.S.C. 
        1637(a)) is amended by inserting after paragraph (8) the 
        following new paragraph:
            ``(9) In the case of any account under which a credit card 
        issued in connection with the account bears the logo of any 
        electronic payment system network, the amounts of any fees 
        charged by the network, or any agent, processor, or licensed 
        member of the network, in connection with any aspect of 
        transactions initiated by the consumers using such credit card, 
        including any interchange, processing, or other fees.''.
            (2) Section 127(b) of the Truth in Lending Act (U.S.C. 
        1637(b)) is amended by adding at the end the following new 
        paragraph:
            ``(13) In the case of any account under which a credit card 
        issued in connection with the account bears the logo of any 
        electronic payment system network, if any fee was charged by 
        the network, or any agent, processor, or licensed member of the 
        network, in connection with any aspect of a transaction which 
        resulted in an extension of credit reported on such statement, 
        the amount of such fee, including any interchange, processing, 
        or other fee.''.
            (3) Section 127(c)(1)(A) of the Truth in Lending Act 
        (U.S.C. 1637(c)(1)(A)) is amended by adding at the end the 
        following new clause:
                            ``(v) Interchange and other fees.--In the 
                        case of an application or solicitation to open 
                        an account under which a credit card issued in 
                        connection with the account would bear the logo 
                        of any electronic payment system network, the 
                        amounts of any fees charged by the network, or 
                        any agent, processor, or licensed member of the 
                        network, in connection with any aspect of any 
                        transaction initiated by the consumer using 
                        such credit card, including any interchange, 
                        processing, or other fees.''.
            (4) Section 127(c)(4)(A) of the Truth in Lending Act 
        (U.S.C. 1637(c)(4)(A)) is amended by adding at the end the 
        following new clause:
                            ``(iv) In the case of an application or 
                        solicitation to open an account under which a 
                        charge card issued in connection with the 
                        account would bear the logo of any electronic 
                        payment system network, the amounts of any fees 
                        charged by the network, or any agent, 
                        processor, or licensed member of the network, 
                        in connection with any aspect of transactions 
                        initiated by the consumer using such charge 
                        card, including any interchange, processing, or 
                        other fees.''.
            (5) Section 130(a) of the Truth in Lending Act (U.S.C. 
        1640(a)) is amended by striking ``chapter 4 or 5'' and 
        inserting ``chapter 4, 5, or 6''.
            (6) Section 130(b) of the Truth in Lending Act (U.S.C. 
        1640(b)) is amended by inserting ``or 6'' after ``chapter 5''.
            (7) Section 130(g) of the Truth in Lending Act (U.S.C. 
        1640(g)) is amended by striking ``chapter 4 or 5'' and 
        inserting ``chapter 4, 5, or 6''.
            (8) Section 906(c) of the Electronic Fund Transfer Act 
        (U.S.C. 1693d(c)) is amended--
                    (A) in paragraph (3), by striking ``and'' after the 
                semicolon at the end;
                    (B) in paragraph (4), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) in the case of an account under which an electronic 
        fund transfer may be initiated by the consumer by means of any 
        card or other device issued by the financial institution which 
        bears the logo of any electronic payment system network, if any 
        fee was charged by the network, or any agent, processor, or 
        licensed member of the network, in connection with any aspect 
        of a transaction which resulted in an electronic fund transfer 
        reported on such statement, the amount of such fee, including 
        any interchange, processing, or other fee.''.
    (c) Clerical Amendment.--The table of chapters for the Truth in 
Lending Act is amended by inserting after the item relating to chapter 
5 the following new item:

   ``6. Prohibition on Unfair Practices in Electronic Payment System 
Networks................................................................
              ......................................191''.

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