Federal regulation is having a significant impact on the payments industry. Many payment businesses have spent 2011 wrestling with the new Internal Revenue Service 1099-K reporting requirements contained in the Housing and Economic Recovery Act of 2008. The industry is also creating new pricing structures in the wake of debit card interchange caps imposed by the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
This year lawmakers introduced a plethora of bills aimed at increasing the security of personal information used in transactions and mitigating the effects of the Durbin Amendment. Below is an update on this federal legislation.
H.R. 3156: The Consumer Debit Card Protection Act
Purpose: This bill would repeal the Durbin Amendment.
Sponsor: Rep. Jason Chaffetz, R-Utah, and Rep. Bill Owens, D-N.Y.
Status: House Financial Services Committee
H.R. 3190: To amend the Federal Deposit Insurance Act to prohibit insured depository institutions from charging consumers fees for the use of debit cards
Purpose:Some banks are attempting to recover revenue lost to the Durbin Amendment debit card interchange cuts by imposing fees for using debit cards. This legislation would block that practice.
Sponsor: Rep. David Cicilline, D-R.I.
Status: House Financial Services Committee
S. 575: Debit Interchange Fee Study Act of 2011
Purpose: This Senate bill calls for a study of debit card interchange fees.
Sponsor: Sen. Jon Tester, D-Mont.
Status: Senate Banking, Housing, and Urban Affairs Committee
S. 1408: Data Breach Notification Act of 2011
Purpose: This bill would require federal agencies and persons engaged in interstate commerce who are in possession of data containing personally identifiable information to disclose any breach of that information.
Sponsor: Sen. Diane Feinstein, D-Calif.
Status: Passed Senate Judiciary Committee Sept. 22, 2011. Scheduled for debate.
S. 1535: Personal Data Protection and Breach Accountability Act of 2011
Purpose: This bill would strive to lessen the impact on consumers of personal information theft, require breach notification, hold companies responsible for breaches, help facilitate the sharing of information among companies after a breach, and increase penalties for data theft and computer fraud.
Sponsor: Sen. Richard Blumenthal, D-Conn.
Status: Passed Senate Judiciary Committee Sept. 12, 2011. Scheduled for debate.
S. 799: Commercial Privacy Bill of Rights Act of 201l
Purpose: This bill would put the Federal Trade Commission in charge of creating and policing personal identification security regulations.
Sponsor: Sen. John Kerry, D-Mass.
Status: Senate Commerce, Science, and Transportation Committee
H.R. 1707: Data Accountability and Trust Act
Purpose: This bill would set security policies and procedures for protecting personal data. It also would require nationwide alerts when personal data has been stolen.
Sponsor: Rep. Bobby Rush, D-Ill.
Status: House Energy and Commerce Committee's Subcommittee on Commerce, Manufacturing, and Trade
H.R. 1841: To protect consumers by requiring reasonable security policies and procedures to protect computerized data containing personal information, and to provide for nationwide notice in the event of a security breach
Purpose: This bill would make the FTC responsible for creating regulations requiring anyone storing sensitive personal information to have appropriate security and procedures in place.
Sponsor: Rep. Clifford Stearns, R-Fla.
Status: House Energy and Commerce Committee's Subcommittee on Commerce, Manufacturing, and Trade
S. 890: Fighting Fraud to Protect Taxpayers Act of 2011
Purpose: This bill would increase penalties for password and personal identification theft and other forms of computer fraud.
Sponsor: Sen. Patrick Leahy, D-Vt.
Status: Judiciary Committee's Subcommittee on Administrative Oversight and the Courts
S. 1434: Data Security Act of 2011
Purpose: This bill would attempt to protect consumer information and require notice of security breaches.
Sponsor: Sen. Thomas Carper, D-Del.
Status: Committee on Banking, Housing, and Urban Affairs
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