The Electronic Transactions Association, the national merchant-acquiring trade group, is ramping up its presence on Capitol Hill to stem the increasing regulation of the payments industry. The Washington, D.C.-based ETA recently spawned the creation of so-called payments caucuses in both the Senate and House of Representatives, chief executive Jason Oxman said Thursday at the MidWest Acquirers Association annual conference in Chicago.
The House version is called the House Payments Technology Caucus and the upper chamber’s is known as the Senate Payments Innovation Caucus. The House caucus, according to the ETA, has 19 members and is led by two Republicans and two Democrats each from Georgia and Texas, two states with a major payments-industry presence. The Senate caucus has three leaders, but its total membership was not immediately available.
“The bottom line is these are caucuses which are led by members of Congress who have payments companies in their districts, who have a lot of payments business happening in their districts, or in their states in cases of the Senate, and are very interested in our industry,” said Oxman. “The goal of this effort is ETA, on behalf of our 500-plus member companies, telling the story in Washington about the importance of our industry, and actually getting Congress to act against some of this regulatory overreach that we’re seeing in the payments industry.”
Oxman also said that the ETA now has four full-time government-affairs staff members versus one-half of a position when he took the association’s helm about three years ago. The ETA’s chief lobbyist is senior vice president Scott Talbott, who joined the association in early 2014 after serving as senior vice president for public policy at The Financial Services Roundtable, a powerhouse group of Wall Street companies.
Oxman was one of four panelists at the MWAA conference who reviewed recent regulatory and legal developments affecting the acquiring industry. As acquirers have been doing for more than two years, they decried federal regulators’ approach to dealing with fraudulent merchants, which is to cut off their access to payment services. That approach, once formally known as Operation Choke Point, was exemplified in an April lawsuit by the Consumer Financial Protection Bureau against processor Global Payments Inc. and three ISOs, is to say that the acquirer or ISO knew or should have known what the suspect merchant was up to.
“The CFPB is looking at ISOs, and they’re looking very carefully,” said Oxman, who claimed the Bureau, a creation of the 2010 Dodd-Frank Act, has “a virtually unlimited mandate, they can basically do whatever they want.”
Acquirers say the regulators’ approach places an undue burden on them to know what their merchants are doing, and is a tool for the government to marginalize high-risk but legal, if disfavored, industries such as payday lenders and debt collectors.