S. 3623: Credit Card Competition Act of 2026

The Credit Card Competition Act of 2026 includes several provisions aimed at increasing competition among credit card networks and improving consumer choice. Below are the key elements of the bill:

Regulations on Credit Card Networks

The bill mandates that the Board of Governors of the Federal Reserve System will create regulations to encourage competition in credit card transactions. Key aspects include:

• No Exclusive Networks: Credit card issuers will not be allowed to limit the number of payment networks a credit card can be processed on. They must allow at least one or two networks that either meet certain conditions or are the largest in the market.
• No Routing Restrictions: Businesses that accept credit cards will not be restricted in choosing which network to use for processing transactions. They cannot be penalized for selecting a network that might not be affiliated with their credit card.

Risk Assessments and Security Designations

The Federal Reserve Board will identify and maintain a public list of payment networks that are considered to pose national security risks, which are defined as being owned or operated by foreign state entities. They will review and update this list at regular intervals.

Definitions

The bill provides specific definitions for various terms such as:

• Covered Card Issuer: A card issuer with assets exceeding $100 billion.
• Credit Card in a 3-Party Payment System: Referring to credit cards from issuers that also operate the payment network.

Implementation Timeline

The Federal Reserve is required to implement the outlined regulations within a year of the bill's enactment. The regulations will include provisions to ensure ongoing competition and consumer protections.

Exemptions

The bill specifies that certain provisions may not apply to credit cards associated with three-party payment systems, which typically include networks that both issue credit cards and operate their processing platforms.

Enforcement

Consumer protections and enforcement mechanisms will be clarified, indicating that the Bureau does not have authority to enforce the newly prescribed regulations.

Relevant Companies

• Visa (V): As one of the largest credit card networks, Visa may face changes in its operations due to increased competition and potential reductions in fees associated with credit card transaction processing.
• Mastercard (MA): Similar to Visa, Mastercard could be affected by regulatory changes aimed at ensuring that merchants can choose payment networks without restrictions.
• American Express (AXP): The company, which operates a closed-loop payment system, may need to adapt to competition from more open systems resulting from this bill.