Visa 2014 Annual Report Download - page 31

Regulation in the areas of consumer privacy and data use and security could decrease the
number of Visa-branded cards issued, our payments volume and our revenues.
Privacy, data use and security continue to receive heightened legislative and regulatory focus in
the United States and elsewhere. For example, in many jurisdictions consumers must be notified in the
event of a data breach and those jurisdictions who have these laws are continuing to increase the
circumstances and the breadth of these notices. Our failure or the failure of our clients to comply with
these laws and regulations could result in fines, sanctions, litigation and damage to our global
reputation and our brands. These measures may increase Visa’s and our clients’ costs, decrease the
number of Visa-branded cards our clients issue, and decrease our payments volume and revenue.
Evolving and increased global regulatory focus on the payments industry may result in costly
new compliance burdens on our clients and on us, leading to increased costs, decreased
payments volume and a material, adverse impact on our financial condition, revenues, results
of operations, prospects for further growth and overall business.
Regulation of the payments industry has evolved and increased significantly. Examples include:
•Data protection and information security. Aspects of our operations and business are subject
to privacy and data protection regulation in the United States and elsewhere. Our financial
institution clients around the globe are subject to similar requirements under privacy laws and
bank regulatory regimes. In addition, many U.S. states have enacted legislation requiring
consumer notification in the event of a security breach.
•Regulatory compliance. We are subject to anti-money laundering laws and regulations,
including the U.S. Bank Secrecy Act, as amended, including the USA PATRIOT Act of 2001.
In addition, we are also subject to the economic and trade sanctions programs administered
by OFAC that prohibit or restrict dealings with certain countries, their governments and, in
certain circumstances, their nationals, as well as with specifically-designated individuals and
entities such as narcotics traffickers, terrorists and terrorist organizations. An increase in the
number of OFAC sanctions, such as those issued in connection with the Russia-Ukraine
conflict, may affect the issuance, acceptance, reputation, and revenues of Visa-branded
cards. In addition, some of our clients located outside of the United States may not be subject
to these same laws, regulations and sanctions, and, as a result, may initiate transactions that,
while permissible in their countries, are not permissible in the United States. We have
policies, procedures, systems and controls designed to identify and address potentially
impermissible transactions. Regulation of the price of credit. Many jurisdictions in which Visa-
branded cards are used have regulations that could increase the costs of card issuance or
decrease the flexibility of issuers to charge market-based interest rates and fees on credit
card accounts. These include the Credit CARD Act of 2009 in the United States and other
proposed regulations under it, and proposed changes to regulations under the Truth in
Lending Act of 1968.
•Increased CFPB scrutiny. The Consumer Financial Protection Bureau (the “CFPB”) has
primary oversight and rule-writing authority over consumer financial products in the United
States, including the regulations that apply to credit, debit, and prepaid cards. Regulatory
changes that impose new requirements on or restrict the terms under which financial products
can be offered could increase our clients’ costs and decrease the number of Visa-branded
payment cards our clients issue. The CFPB also has supervisory and independent
examination authority as well as enforcement authority over certain financial institutions,their
service providers, and other entities,which could include us due to our processing of credit,
debit, and prepaid transactions.
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