HR7035-119

What This Bill Does

The Credit Card Competition Act of 2026 amends the Electronic Fund Transfer Act to add credit-card routing competition rules. Within one year, the Federal Reserve Board must prohibit covered card issuers and payment card networks from restricting a covered issuer's credit card to one network, to only affiliated networks, to networks affiliated with the issuer, to networks on a Board list, or, subject to later Board determinations, to the two largest credit-card networks by U.S. cards issued. The Board must revisit whether the two largest networks have changed at least every three years. The Board also must bar covered issuers and networks from inhibiting merchants' ability to route electronic credit transactions over any available network not on the Board's list, from requiring merchants to use security technology that cannot be used by all available networks, from blocking another network's ability to process transactions using authentication or tokenization technology, or from penalizing merchants for choosing routing. The bill is designed to give merchants more routing choice in credit-card transactions, similar in concept to debit-routing competition.

Who Benefits and How

Merchants, small businesses, retailers, restaurants, grocers, and other businesses that accept credit cards benefit if routing competition lowers network fees or gives them leverage over payment costs. Smaller payment card networks and payment processors benefit from a path to compete for credit-card transaction routing. Consumers may benefit if merchants pass through some savings or if payment competition improves service. The Federal Reserve benefits from clearer statutory authority to regulate credit-card routing competition.

Who Bears the Burden and How

Large covered card issuers, dominant payment card networks, and issuer-affiliated networks face compliance costs, lost exclusivity, and potential revenue pressure. The Federal Reserve must write rules, identify covered networks, update the list, revisit market-share determinations, and enforce routing restrictions. Merchants and processors must update payment systems and security technology to support routing choice. Banks and networks may need to renegotiate contracts and technical specifications.

Key Provisions

• Requires Federal Reserve credit-card routing competition regulations within one year.
• Prohibits covered issuers and networks from limiting covered credit cards to one network or only affiliated networks.
• Restricts use of the two largest credit-card networks as the only enabled networks on covered cards.
• Requires recurring Federal Reserve determinations of the two largest credit-card networks.
• Prohibits issuer or network rules that inhibit merchant routing over available unaffiliated networks.
• Prohibits exclusive authentication, tokenization, or security technology restrictions that block competing networks.
• Prohibits penalties or disadvantages for merchants choosing transaction routing.