Industry Views: What Does a GOP Congress Mean to Payments?

Written by FinTech Futures
13th January 2015

We asked a number of prominent players in emerging payments to give us their opinions on what the shift in the 114th Congress might mean to payments.

“Generally, I doubt the change is going to make much difference—at least from a pure legislative standpoint. For example, I doubt major changes to Dodd-Frank will be passed by both Houses and then signed by the President. But, I do think there’s likely to be more subtle impacts: a higher level of scrutiny on regulatory or law enforcement actions, such as Operation Chokepoint; congressional hearings on what constitutes regulatory abuse and costs of compliance; a closer look at how to tighten the purse-strings of various agencies in order to influence policy; and more delays in executive appointments, of course.”

Judith Rinearson, Partner, Bryan Cave LLP

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“The funding, structure and operations of the CFPB are obvious subjects that may find an increased appetite among members of Congress. With Republicans in the Senate majority, House members, like Rep. Randy Neugebauer (R–Texas), who have shown interest in the CFPB, may find Senate allies for CFPB restructuring.

“With this shift in power, much of the day-to-day change will reveal itself in subtle, small ways. Each member of Congress comes to Washington with his or her own interests of particular importance to him and his constituents; that is, issues that are focused on and worked on almost daily. Certain topics will now be deemphasized in the workings of Congress; replaced by new interests. It is here in the day-to-day work of congressional staff, against the background of the shift in individual priorities brought by the 2014 election, that the payments industry will find both opportunities and challenges.”

Michael Sheridan, Attorney, Butler Snow LLP

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“On the surface we would look to an all-Republican Congress as a positive for the payments industry. The general assumption, of course, is that Democrats regulate and Republicans deregulate. As we’ve seen all too frequently, however, there’s no blanket rule here, and, depending on current politics, economics or the way the wind blows, Republicans can regulate with the best of them.

“We only need to look at the ongoing struggle in New Jersey as evidence. In this case, with direction from the Republican governor, the state looks to take the role of acting on its citizens’ behalf to claim unredeemed gift card funds, even though expiration dates have long been a thing of the past and the owners of those gift cards actually hold the funds. Additionally, New Jersey looks to prove it has a claim on those cards by requiring registration (raising privacy concerns)—not your typical Republican game plan. Finally, in this case, Democrats in the state look to strike this down, which appears the more pro-business approach.

“Perhaps, the real outlook with an all-Republican Congress, at least as long as we still have a Democrat in the White House, is more gridlock and, therefore, no real action either.”

Steven Kane, Group President, Gift Sales and Business Development, Spaﬁnder Wellness Inc.

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“Many of my colleagues express their optimism that a Republican-led 114^th Congress will mean less regulation for our industry. While it’s way too early to say what might happen over the next few years, the safest bet is a firm dedication to the fundamentals that work in Washington: We need to work both sides of the aisle!

“Payment products play an important role in our economy, and both Republicans and Democrats can and should be champions for this industry. It’s our responsibility to tell our story to Congress so it understands how important payment products are to our financial infrastructure and the millions of Americans who rely every day on these unique financial tools.”

Doug Bower, President and Executive Director, Network Branded Prepaid Card Association

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“Since 2009, financial recovery and regulatory compliance have consumed overwhelming mindshare and resources in the banking industry. This reality, while influenced by politics, is primarily a consequence of the broader economy and business cycle. With economic recovery underway, now is the time for the financial services and payments industry to renew its focus on customers and innovation. It’s incumbent upon all of us in industry and government to create an environment conducive to helping people meet their financial obligations and achieve their financial goals.”

Drew Edwards, CEO, Ingo Money

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“As the 114^th Congress convenes this month, with Republicans holding a majority in both houses, it’s critical to remember how big the payments industry is and how it cannot continue to be innovative and grow unless we work with both sides of the aisle.

The U.S. payments industry is estimated to generate $50 billion in revenue—as of FY 2014 and is projected to grow to $65 billion in revenue by 2016.

In InComm’s home state of Georgia alone, 70 percent of all U.S. payments are processed, and 40,000 employees work directly for more than 70 Georgia-based transaction processing companies in-state, generating approximately $30 billion in revenue as of FY 2014. (An estimated additional 100,000+ employees work for these Georgia-based processing companies worldwide.)

“Georgia is a model of how federal and state Republicans and Democrats can work together to promote and champion the payments industry, stressing how much revenue, taxes and jobs are created by the payments industry—locally and worldwide!

“As Atlanta Mayor Kasim Reed recently said at a Georgia processors’ town hall meeting, ‘You can’t love jobs and hate business!’

“If the payments industry engages with both political parties, congressional leaders can promote, advocate and influence key decision makers on the merits and benefits of prepaid products, which will enable the creation of new products and additional sales, taxes and jobs.

“In my opinion, the prepaid payments industry should support state and congressional leaders—regardless of their political party—who collectively champion the payments and prepaid industry to regulators and government agencies.”

Bob Skiba, EVP, Regulatory and Government Affairs, InComm, International
Chairman, Network Branded Prepaid Card Association

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“Republican control of Congress probably will not have a dramatic impact on the payments industry in the near term. Republicans have solid majorities in both houses, but they aren’t veto-proof majorities. Some Republicans would like to replace the CFPB director with a commission and put the CFPB’s budget directly under congressional control. However, the President likely will veto any bill that limits the CFPB’s independence. Congress might try to use its oversight authority to influence the direction of CFPB rulemaking on prepaid accounts or other subjects of interest to the payments industry, but it’s hard to predict how much of an impact they will have.”

David Beam, Partner, K&L Gates LLP

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“All things being equal, a GOP majority may be sympathetic to payments issues, but it won’t be anti-consumer either. Issues like cybersecurity and data breach notification transcend party lines, and we will undoubtedly see activity there. While we will not see any new, comprehensive reform law like the Dodd-Frank Act, a GOP majority may succeed at reforming aspects of the CFPB. However, that will only occur if President Obama feels he needs to negotiate with the GOP in order to get other elements of his agenda passed. Generally, Congress seems more interested in payments than ever before. This interest is unlikely to translate to new legislative measures, but they will be watching the industry closely.”

Kim Ford, Vice President—Public Affairs, First Data

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“Policy issues that are top priorities of the payments industry are not partisan issues, so the change in control of the Senate will see the Electronic Transactions Association continue to drive industry priorities forward. For example, national data breach notification standards have support on both sides of the aisle. Our industry is deploying new mobile payments technology, and federal agencies must ensure that legacy regulations and enforcement activities don’t hinder consumer and merchant-friendly secure commerce solutions. As the trade association of the payments industry, ETA will continue to work with Congress to ensure federal agencies are supporting innovation.”

Jason Oxman, CEO, Electronic Transactions Association

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“I’m always hopeful that, irrespective of party in control, the test of reasonability will win the day. As the payments industry continues the very necessary and ongoing process of educating our legislators and their staffs on the importance and validity of electronic payments—even those that may seem untraditional—we must reach out to both sides of the aisle. Reasonability isn’t defined by party affiliation, but by a willingness to keep an open mind and fairly and objectively evaluate differing points of view. I look forward to working with many in the 114^th Congress with those qualities.”