News/Lawmaker News

Banks warn credit card bill could kill gift cards

Bank-issued gift cards could disappear in some states and become more expensive in others if the credit card reform bill before the Senate becomes law, the banking industry warned Thursday.

Companies warned that if a section, “Title IV,” of the Senate version of the Credit Card Holders’ Bill of Rights became law, states could create a patchwork of regulations to replace the single standard that had governed the companies up until now.

Under the legislation, the prepaid cards — which are often given as gifts — would become prohibitively expensive in some states, banks allege, particularly where regulations prevent maintenance fees and extend expiration dates.

“At the end of the day, some consumers in states with more onerous or restrictive laws just won’t be able to have these products,” an industry representative said, who declined to be identified because they were not authorized to speak on behalf of their company.

The representative said the cards would be almost immediately unavailable in as many as four states if not more if the bill became law.

Tags Credit card Debit card Economics Financial services Gift card Merchant account Money Payment systems Stored-value card

Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

See all Hill.TV See all Video

Most Popular

Load more


See all Video