Visa 2008 Annual Report Download - page 30

Table of Contents
banking agencies have increased their scrutiny of the disclosure and billing practices of credit card issuers. The Federal Reserve Board has
proposed significant changes to Regulation AA and Z, under the Federal Truth in Lending Act, which, if implemented, could have a significant
affect on the advertising, disclosure and billing practices of card issuers. Proposed or other changes to the laws and or regulations affecting credit
card operations and pricing could increase the costs of card issuance and/or decrease the flexibility of card issuers to charge interest rates and fees
on credit card accounts. Any such unfavorable regulation of the practices of card issuers could result in a decrease in our payments volume and
revenues.
• Regulation of Internet Transactions. Many jurisdictions in which we and our customers operate are considering, or are expected to consider,
legislation concerning Internet transactions, and in particular with regard to choice of law, the legality of certain e-commerce transactions, the
collection of applicable taxes and copyright and trademark infringement. Such legislation may make it less desirable or more costly to complete
Internet transactions using our cards.
• Safety and Soundness Regulation. In recent years, federal banking regulators in the United States have adopted a series of regulatory measures
intended to require more conservative accounting, greater risk management and higher capital requirements for bank credit card activities, which
may make becoming an issuer of our cards less attractive.
Increased regulatory focus in connection with the matters discussed above may increase our costs, which could materially and adversely affect our
financial performance. Similarly, increased regulatory focus on our customers may cause a reduction in payments volume, which could materially adversely
affect our revenues, operating results, prospects for future growth and overall business.
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.
We and our customers are subject to regulations related to privacy and data use and security in the jurisdictions in which we do business, and we could
be adversely affected by these regulations. For example, in the United States, we and our customers are subject to the banking regulators' information
safeguard rules and the Federal Trade Commission's rules under the Gramm-Leach-Bliley Act. The rules require that we and our customers 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.
In recent years, there has been heightened legislative and regulatory focus on data security, including requiring consumer notification in the event of a
data breach. 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. 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.
Regulation of privacy, data use and security may materially increase our costs and our customers' costs and may decrease the number of our cards that
our customers issue, which could materially and adversely affect our profitability. Our failure, or the failure of our customers, to comply with the privacy and
data use and security laws and regulations to which we are subject could result in fines, sanctions and damage to our global reputation and our brand.
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