Navigating the evolving regulatory landscape

We continue to meet with lawmakers in Washington, D.C., and at the state level, with industry trade groups and coalitions, and we are actively advocating for our collective best interests by engaging on policy matters that impact our businesses. Below are brief updates on various regulatory and legislative developments, including rate caps, interchange fees and interest rates. 

Rate caps appear unlikely

Earlier this year, there were calls for Congress to pass a one-year, 10% interest rate cap on all credit cards. While a few members of Congress have indicated support of such a bill, the majority of leadership in bot chambers and respective operative committees have not supported the proposed legislation.

Credit Card Competition Act (CCCA) not expected to impact Bread Financial

The CCCA (also known as the Durbin-Marshall bill) was reintroduced in the U.S. Senate in January and aims to lower credit card swipe fees by requiring issuers with more than $100 billion in assets to allow transactions to be processed on at least two unaffiliated networks. Bread Financial operates below that threshold.

Regulatory environment remains collaborative

We are observing a regulatory environment that is more favorable toward and collaborative with banking institutions compared to the recent past.

State-level complexities: The new frontier of regulation

While the federal landscape remains relatively steady, we are closely monitoring and actively responding to an increasingly fragmented regulatory environment at the state level.

• Interchange fees on taxes, tips – There are widespread state-level efforts attempting to prohibit interchange fees on specific transaction components, most notably taxes and tips. Illinois, for example, recently passed a law prohibiting interchange on these items, which a federal district court ruled enforceable in February. Plaintiffs, including banking groups and networks, have appealed, and a decision is expected before the statute's effective date of July 1, 2026. A law of this nature poses significant operational challenges for the entire settlement system, which does not currently itemize taxes and tips. Beyond the operational hurdles, reduced interchange fees could negatively impact the funding of rewards programs that help drive higher transaction volumes. Bread Financial continues to strongly support industry efforts to maintain the financial integrity of the current system, so that your operations are loyalty offerings are not disrupted. 
• Interest rates and fees – Since 1980, the Depository Institutions Deregulation and Monetary Control Act (DIDMCA) has allowed state-chartered banks to export their home state rates and fees uniformly across the country. Recently, states like Colorado and Oregon have passed legislation attempting to opt out of DIDMCA, aiming to impose individual state rates and fees on loans provided to their residents by out-of-state state-chartered banks. Bread Financial has strongly supported a federal lawsuit that successfully generated a preliminary injunction against Colorado. That decision was reversed by a 3-judge panel on appeal (a 2-1 decision). Industry groups have now asked the 10th Circuit Court of Appeals to hold a full 12-judge panel review to overturn the 2-1 decision in Colorado’s favor. 

We appreciate your continued trust and partnership as we navigate these complexities together and will continue to keep you informed of our perspective on the ever-evolving regulatory landscape.