2025 Regulatory Summit

If An Issuer Is Exempt, “Upstream” Entities Involved with this Issuer’s Transactions Also Need to Be Granted Relief

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Preemption for Third Parties

• Unresolved Question: Scope of NBA Preemption – Key issue: Does NBA preemption extend to card processors and card networks? • Dodd-Frank Act Limitation – Overruled Watters ; narrowed NBA preemption. – Section 1045: “No provision of this title or section 24 of the Federal Reserve Act (12 U.S.C. § 371) shall be construed as preempting, annulling, or affecting the applicability of State Law to any subsidiary, affiliate, or agent of a national bank.” • Agents of Banks? – Open question: Are card processors and networks acting as “agents” of issuing banks? – If so, Dodd-Frank suggests they are subject to state law—even where the national bank itself is protected by NBA preemption.

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