Credit Card Competition Act of 2026
S.3623 – Credit Card Competition Act of 2026 to increase network choice in credit card payments
119th Congress
This bill would change federal law so that big banks and card companies cannot limit most credit card payments to only one or two processing networks. It tells the Federal Reserve to write rules that give stores more choice over how credit card transactions are routed, and to flag networks that may pose national security risks. It has been introduced in the Senate and sent to the Committee on Banking, Housing, and Urban Affairs.
- Bill Number
- S3623
- Chamber
- senate
What This Bill Does
The bill amends the Electronic Fund Transfer Act to require the Federal Reserve Board to write new rules about competition in credit card processing. These rules would apply to “covered card issuers,” which are card issuers and their affiliates with more than $100 billion in assets. The Federal Reserve must ban covered card issuers and payment card networks from limiting a credit card so that it can only be processed on a single network. They also could not limit it to two or more networks if those networks are all affiliated with each other, affiliated with the issuer, or appear on a Federal Reserve list of restricted networks. They also could not force cards to use only the two networks with the largest U.S. market shares, once the Federal Reserve later finds that those top two have changed. The bill also tells the Federal Reserve to write rules that stop covered card issuers and networks from blocking stores from choosing which allowed network to use for each transaction. Issuers and networks could not punish a store for routing a transaction over any network that can process it and is not on the restricted list. They also could not require a store to use security tools, like tokenization or authentication, that cannot work with all available networks, or block other networks from using those tools. The new rules would not apply to “three‑party” systems, where the same company is both the card issuer and the network, or under common ownership with the network. The Federal Reserve, working with the Treasury Department, must create and update a public list of payment card networks that either pose a national security risk or are owned, operated, or sponsored by a foreign state entity. Finally, the bill states that the Consumer Financial Protection Bureau may not enforce this section; only the Federal Reserve would enforce these new requirements. Each set of regulations would become effective 180 days after the Federal Reserve issues the final rules.
Why It Matters
The bill could change how credit card payments are processed behind the scenes. Large card issuers and networks would need to allow more than one unaffiliated network option on many credit cards and allow merchants to choose among them, which may affect fees, speed, and technology used for transactions. Merchants might gain more control over which networks handle their credit card payments, which could influence their costs and business practices. Card networks that are owned or backed by foreign governments, or that raise national security concerns, could be limited if they are placed on the Federal Reserve’s public list. The exact effects on consumers, such as prices or rewards, are not stated in the bill and are unclear. For regulators, the bill gives the Federal Reserve new duties to write and update rules on credit card network access and to review networks for possible national security risks on a regular schedule. It also narrows the enforcement role of the Consumer Financial Protection Bureau for this particular section of the law, making the Federal Reserve the main enforcer.
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Arguments
Arguments in support
- Could increase competition among payment card networks by preventing large issuers from locking cards to a single or limited set of affiliated networks.
- May allow merchants to seek lower processing costs or better terms by choosing among multiple networks for each transaction.
- Seeks to ensure that security technologies used in credit card payments are available across networks, which might support interoperability.
- Creates a formal, transparent process for identifying and listing networks that pose national security risks or are tied to foreign state entities.
- Clarifies that a single regulator, the Federal Reserve, is responsible for enforcing these specific network‑competition rules, which may simplify oversight for issuers and networks.
Arguments against
- Large card issuers and networks may need to change systems and contracts, which could increase their operating complexity and costs.
- Some stakeholders may be concerned that merchant routing choices could affect the stability or funding of current rewards, benefits, or business models, even though the bill does not address these directly.
- Requiring compatibility of security technologies across multiple networks might be seen as limiting some proprietary security approaches or slowing adoption of new tools.
- Concentrating enforcement authority with the Federal Reserve, while excluding the Consumer Financial Protection Bureau, could raise questions about consumer‑focused oversight of this part of the law.
- The process for designating networks as national security risks, and the effects of being placed on the public list, may raise concerns for international payment networks and cross‑border commerce.
Key Facts
- Applies to “covered card issuers,” defined as issuers whose combined assets with affiliates exceed $100 billion.
- Requires the Federal Reserve to issue regulations within 1 year of enactment to prevent exclusive or highly limited network access on covered credit cards.
- Prohibits limiting a credit card to: (1) one network; (2) only affiliated networks or networks on a restricted list; or (3) only the two largest market‑share networks, subject to a later Federal Reserve review.
- Directs the Federal Reserve, at least every 3 years, to review whether the top two networks by market share have changed; once they have changed, the special treatment for those two networks ends.
- Requires rules that bar issuers and networks from blocking merchants’ ability to choose routing over any eligible network that is not on the restricted list.
- Forbids penalties or disadvantages against merchants based on how they route transactions or on failing to send a set volume of business to a particular network.
- Bans requiring merchants to use security technologies (such as tokenization or authentication) that cannot be used by all eligible networks for that card.
- Exempts three‑party payment system models, where the issuer and network are the same or under common ownership, from these new network‑competition rules.
- Orders the Federal Reserve, in consultation with the Treasury, to create a public list of payment card networks that pose national security risks or are owned, operated, or sponsored by a foreign state entity, and to update this list at least every 2 years.
- Specifies that the Consumer Financial Protection Bureau may not enforce this section; enforcement authority remains with the Federal Reserve.
- States that each set of new regulations becomes effective 180 days after the Federal Reserve issues its final version of that rule set.
Gotchas
- Three‑party card systems (where the issuer and network are the same or under common ownership) are exempt, so the new competition rules do not apply to those brands.
- The bill disables enforcement by the Consumer Financial Protection Bureau for this section only, which is a targeted change to existing enforcement structures.
- The special rule about the two largest networks by market share automatically ends once the Federal Reserve later finds that the top two networks have changed, a built‑in sunset tied to market structure rather than a fixed date.
- The national security list can include networks solely because they are owned, operated, or sponsored by a foreign state entity, even without a separate, specific risk finding under the first prong.
Full Bill Text
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[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [S. 3623 Introduced in Senate (IS)] <DOC> 119th CONGRESS 2d Session S. 3623 To amend the Electronic Fund Transfer Act to require the Board of Governors of the Federal Reserve system to prescribe regulations relating to network competition in credit card transactions, and for other purposes. _______________________________________________________________________ IN THE SENATE OF THE UNITED STATES January 13, 2026 Mr. Marshall (for himself, Mr. Durbin, and Mr. Welch) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs _______________________________________________________________________ A BILL To amend the Electronic Fund Transfer Act to require the Board of Governors of the Federal Reserve system to prescribe regulations relating to network competition in credit card transactions, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,