How SHAZAM Advocates For Your Financial Institution

Article contributor: Dan Kramer / Executive Vice President, Government and Community Affairs

SHAZAM continually advocates for issues important to your financial institution. At the center of our efforts to ensure the country’s payments network is constructed in a fair and open way is Dan Kramer, Executive Vice President, Government and Community Affairs.

Dan directs and oversees all aspects of SHAZAM’s government relations activities at the local, state and federal levels. He understands the concerns of community financial institutions surrounding payments issues, working relentlessly to ensure those perspectives are represented in decisions made by lawmakers across the country.

“My role at SHAZAM gives me the opportunity to be involved in decision making for payments issues on behalf of our customers,” says Kramer. “Lawmakers create the policies regulating our industry. Our end of the deal is to hold them accountable to ensure our voices are heard and our views are represented.”

Right now, Dan is focused on legislation impacting interchange revenue. A small but growing number of states have introduced legislation to ban a portion of debit card interchange on sales tax.

If one of these bills were ever to become law, not only would it directly impact the income your financial institution earns from your cardholders’ transactions, but it could also be costly to small businesses and consumers.

“A ban on collecting interchange on the sales tax portion of electronic payment transactions threatens innovation and system security, which is funded in part through the collection of interchange,” says Kramer. “I encourage financial institutions to have a conversation about this subject with their merchant customers where possible.”

At a national level, Dan is keeping his eye on legislation and government agencies looking to regulate digital currencies, such as cryptocurrency.

A flurry of activity took place in Congress before the August recess. Topics include a formal process to determine when digital assets will be treated as either securities to be regulated by the Securities and Exchange Commission (SEC) or commodities under the Commodity Futures Trading Commission (CFTC), what type of federal/state regulatory regime will exist for payment stablecoins and the how the Bank Secrecy Act (BSA) will apply to cryptocurrency providers.

These proposed pieces of legislation are in their early stages, with more activity expected now that Congress is back from recess.

Also looming, the Federal Reserve is considering a central banking digital currency (CBDC) as a means to expend safe payment options. A CBDC is a digital form of central bank money that is widely available to the general public. The Board of Governors has made no decision on issuing a CBDC and has publicly said it would only issue one as part of an authorizing law.

As lawmakers debate these frameworks impacting the payments industry, SHAZAM clients have an important role to play in how they are implemented.

“Involvement is free. All it takes is just showing up,” says Kramer. “Consider hosting legislators at your bank or credit union. Constituents are the key to getting things done.”