Credit Cards

Credit and Debit Card Electronic Payment Rules

Several new rules affecting dealerships that accept credit or debit cards took affect Oct. 1, 2011. The rules were issued by the Federal Reserve Board as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act to (i) cap debit card interchange fees paid by merchants to debit card issuers each time a customer pays with a debit card; (ii) give merchants options for routing electronic debit transactions over any network that is enabled to process them; (iii) prevent payment card networks and card issuers from designating an exclusive network for processing debit transactions; and (iv) prevent payment card networks from imposing restrictions on merchants’ ability to offer customers discounts for using certain methods of payment. The FTC has provided details on these new rules here.

Please note that there are numerous other issues that affect dealers’ acceptance and treatment of credit card payments in the context of a vehicle financing transaction. Dealers should consult their agreements with their finance sources or contact their legal counsel for details.