Visa 2008 Annual Report Download - page 21

Table of Contents
institutions, and thus are not subject to OFAC restrictions. Accordingly, our payments network may be used with respect to transactions in or involving
countries or parties subject to OFAC-administered sanctions.
In recent years, a number of regulations relating to the price of credit and directed at our financial institution customers have been implemented in some
jurisdictions in which our cards are used. In the United States, regulators and the U.S. Congress have increased their scrutiny of our customers' pricing and
underwriting standards relating to credit. For example, a number of regulations have been issued to implement the U.S. Fair and Accurate Credit Transactions
Act, and one regulation under that Act has been proposed, but is yet to be finalized. The proposed regulation pertains to risk-based pricing and could have a
significant impact on the application process for credit cards and result in increased costs of issuance and/or a decrease in the flexibility of card issuers to set
the price of credit. Other proposed regulations would change the substance and format of consumer disclosures made by credit card issuers and limit the way
in which card issuers change prices on credit card accounts, allocate payments to cardholder balances and regulate other aspects of credit card issuer practices.
In addition, in the current Congress, legislation on credit card issuer practices has passed the U.S. House of Representatives and other legislation on credit
card issuer practices has been introduced in the U.S. Senate. Any regulation or legislation in the area of credit card issuer practices or disclosures could impact
our customers' ability to issue cards profitably in certain segments and impact our payments volume and revenues. See Item 1A—"Risk Factors—Interchange
fees are subject to significant legal and regulatory scrutiny worldwide, which may have a material adverse impact on our revenues, our prospects for future
growth and our overall business," and "—The payments industry is the subject of increasing global regulatory focus, which may result in costly new
compliance burdens being imposed on us and our customers and lead to increased costs and decreased payments volume and revenues."
We and our customers are subject to regulations related to privacy, data use and security in the jurisdictions in which we do business. For example, in
the United States, our customers are subject to the banking regulators' information safeguard rules and we are subject to the Federal Trade Commission's rules
under the Gramm-Leach-Bliley Act. These rules require that our customers and we develop, implement and maintain written, comprehensive information
security programs containing safeguards that are appropriate to our size and complexity, the nature and scope of our activities and the sensitivity of any
customer information at issue. See Item 1A—"Risk Factors—Existing and proposed regulation in the areas of consumer privacy and data use and security
could decrease the number of payment cards issued, our payments volume and revenues."
There has been a heightened legislative and regulatory focus on data security in recent years. In the United States, a number of bills have been
introduced in Congress and there have been several Congressional hearings to address these issues. Congress is considering data security/data breach
legislation which, if implemented, could affect our customers and us, as such legislation may increase our customers' and our costs and decrease the number
of cards that our customers issue. In addition, a number of U.S. states have enacted security breach legislation, requiring varying levels of consumer
notification in the event of a security breach, and several other states are considering similar legislation. See Item 1A—"Risk Factors—Existing and proposed
regulation in the areas of consumer privacy and data use and security could decrease the number of payment cards issued, our payments volume and
revenues."
Governments in certain countries have acted, or could act, to provide resources or protection to selected national payment card providers or national
payment processing providers to support domestic competitors or to displace us from, prevent us from entering into, or substantially restrict us from
participating in, particular geographies. For example, our customers in China are not permitted to issue cards carrying our brands for domestic use in China.
Governments in certain other countries have considered similar restrictions from time to time.
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