To ensure that the fees that small businesses and other entities are charged for accepting debit cards are reasonable and proportional to the costs incurred, and to limit payment card networks from imposing anti-competitive restrictions on small businesses and other entities that accept payment cards.

SA 3989. Mr. DURBIN submitted an amendment intended to be proposed by

[[Page S3652]]

him to the bill S. 3217, to promote the financial stability of the
United States by improving accountability and transparency in the
financial system, to end ``too big to fail'', to protect the American
taxpayer by ending bailouts, to protect consumers from abusive
financial services practices, and for other purposes; which was ordered
to lie on the table; as follows:

At the end of subtitle G of title X, add the following:

SEC. 1077. REASONABLE FEES AND RULES FOR PAYMENT CARD
TRANSACTIONS.

The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.)
is amended--
(1) by redesignating sections 920 and 921 as sections 921
and 922, respectively; and
(2) by inserting after section 919 the following:

``SEC. 920. REASONABLE FEES AND RULES FOR PAYMENT CARD
TRANSACTIONS.

``(a) Reasonable Interchange Transaction Fees for
Electronic Debit Transactions.--
``(1) Regulatory authority.--The Board shall have authority
to establish rules, pursuant to section 553 of title 5,
United States Code, regarding any interchange transaction fee
that an issuer or payment card network may charge with
respect to an electronic debit transaction.
``(2) Reasonable fees.--The amount of any interchange
transaction fee that an issuer or payment card network may
charge with respect to an electronic debit transaction shall
be reasonable and proportional to the actual cost incurred by
the issuer or payment card network with respect to the
transaction.
``(3) Rulemaking required.--The Board shall issue final
rules, not later than 9 months after the date of enactment of
the Consumer Financial Protection Act of 2010, to establish
standards for assessing whether the amount of any interchange
transaction fee described in paragraph (2) is reasonable and
proportional to the actual cost incurred by the issuer or
payment card network with respect to the transaction.
``(4) Considerations.--In issuing rules required by this
section, the Board shall--
``(A) consider the functional similarity between--
``(i) electronic debit transactions; and
``(ii) checking transactions that are required within the
Federal Reserve bank system to clear at par;
``(B) distinguish between--
``(i) the actual incremental cost incurred by an issuer or
payment card network for the role of the issuer or the
payment card network in the authorization, clearance, or
settlement of a particular electronic debit transaction,
which cost shall be considered under paragraph (2); and
``(ii) other costs incurred by an issuer or payment card
network which are not specific to a particular electronic
debit transaction, which costs shall not be considered under
paragraph (2); and
``(C) consult, as appropriate, with the Comptroller of the
Currency, the Board of Directors of the Federal Deposit
Insurance Corporation, the Director of the Office of Thrift
Supervision, the National Credit Union Administration Board,
the Administrator of the Small Business Administration, and
the Director of the Bureau of Consumer Financial Protection.
``(5) Exemption for small issuers.--This subsection shall
not apply to issuers that, together with affiliates, have
assets of less than $10,000,000,000, and the Board shall
exempt such issuers from rules issued under paragraph (3).
``(6) Effective date.--Paragraph (2) shall become effective
12 months after the date of enactment of the Consumer
Financial Protection Act of 2010.
``(b) Limitation on Anti-competitive Payment Card Network
Restrictions.--
``(1) No restrictions on offering discounts for use of a
competing payment card network.--A payment card network shall
not, directly or through any agent, processor, or licensed
member of the network, by contract, requirement, condition,
penalty, or otherwise, inhibit the ability of any person to
provide a discount or in-kind incentive for payment through
the use of a card or device of another payment card network.
``(2) No restrictions on offering discounts for use of a
form of payment.--A payment card network shall not, directly
or through any agent, processor, or licensed member of the
network, by contract, requirement, condition, penalty, or
otherwise, inhibit the ability of any person to provide a
discount or in-kind incentive for payment by the use of cash,
check, debit card, or credit card.
``(3) No restrictions on setting transaction minimums or
maximums.--A payment card network shall not, directly or
through any agent, processor, or licensed member of the
network, by contract, requirement, condition, penalty, or
otherwise, inhibit the ability of any person to set a minimum
or maximum dollar value for the acceptance by that person of
any form of payment.
``(c) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Debit card.--The term `debit card'--
``(A) means any card, or other payment code or device,
issued or approved for use through a payment card network to
debit an asset account for the purpose of transferring money
between accounts or obtaining goods or services, whether
authorization is based on signature, PIN, or other means;
``(B) includes general use prepaid cards, as that term is
defined in section 915(a)(2)(A) (15 U.S.C. 1693l-1(a)(2)(A));
and
``(C) does not include paper checks.
``(2) Credit card.--The term `credit card' has the same
meaning as in section 103 of the Truth in Lending Act (15
U.S.C. 1602).
``(3) Discount.--The term `discount'--
``(A) means a reduction made from the price that customers
are informed is the regular price; and
``(B) does not include any means of increasing the price
that customers are informed is the regular price.
``(4) Electronic debit transaction.--The term `electronic
debit transaction' means a transaction in which a person uses
a debit card to debit an asset account.
``(5) Interchange transaction fee.--The term `interchange
transaction fee' means any fee established by a payment card
network that has been established for the purpose of
compensating an issuer or payment card network for its
involvement in an electronic debit transaction.
``(6) Issuer.--The term `issuer' means any person who
issues a debit card, or the agent of such person with respect
to such card.
``(7) Payment card network.--The term `payment card
network' means an entity that directly, or through licensed
members, processors, or agents, provides the proprietary
services, infrastructure, and software that route information
and data to conduct transaction authorization, clearance, and
settlement, and that a person uses in order to accept as a
form of payment a brand of debit card, credit card or other
device that may be used to carry out debit or credit
transactions.''.
______