The 119th Congress has officially been seated, gearing up to address significant financial services legislation that encompasses a range of topics from credit card regulations to earned wage access (EWA) and digital assets. With Republicans holding the majority, the anticipated leadership of President-elect Trump and his party members appears likely to influence the trajectory of these discussions, particularly regarding the roles of the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB).
The House Financial Services Committee will be chaired by Representative French Hill from Arkansas, while the Senate Banking Committee will be overseen by Senator Tim Scott from South Carolina. Both committees will play pivotal roles in determining the fate of several key legislative measures.
At the forefront of the upcoming discussions is the Credit Card Competition Act (CCCA), which has been a contentious topic since its introduction in 2023. This act aims to allow credit card payments to be routed over a competitor’s network in addition to Mastercard and Visa. However, this proposal has faced significant hurdles, and its path forward remains uncertain. As noted by Karen Webster in a recent column, there are concerns regarding the understanding of how dual routing would impact credit card transactions, as well as misconceptions about the current credit card ecosystem and its monetization strategies.
Another significant piece of legislation under consideration is the Earned Wage Access Consumer Protection Act, which seeks to delineate the roles of EWA providers. This legislation aims to impose strict operational limits, specifically regulating programs sponsored by employers and those offered directly to consumers.
Beyond credit and wage access issues, the Congress will also deliberate on the regulation of digital assets. Previous attempts to establish a legislative framework for digital asset markets, such as the Financial Innovation and Technology for the 21st Century Act, have progressed partway through the legislative process, having passed the House but ultimately failing in the Senate. This proposed legislation includes provisions for consumer protections, standards for digital assets, and the segregation of funds.
In an exclusive interview with PYMNTS, Mike Katz, a partner in the Financial Services Group at Manatt, Phelps and Phillips, commented, “Despite the razor-thin Republican majorities, there is a growing bipartisan consensus in Congress around the need for thoughtful, innovation-focused crypto and AI legislation.” Katz speculated on the possibility of a stablecoin bill gaining momentum, backed by bipartisan support, and mentioned the potential inclusion of digital asset legislation in a tax-and-border-focused reconciliation package currently being discussed.
Looking ahead, Katz urged attention to any developments in early 2025 concerning a restructured version of the pro-crypto bill FIT21, which had received broad bipartisan support in May. He stated, “Regardless of form or timing, new legislation will finally provide clarity on the questions of whether crypto assets are ‘securities’ or ‘commodities’ … and on which regulatory authority is charged with oversight.”
Source: Noah Wire Services