Snapshot of Question 9:  

Will the Governor of the Reserve Bank provide to the House of Representatives in the Commonwealth Parliament an annual written Statement on the Conduct of Monetary Policy which includes, amongst other things, an annual written Report on the Profitability of Credit Cards and also certifies that Visa and MasterCard separately complied with the two weighted-average benchmarks during the relevant year?

Question 9

Will the Federal Treasurer seek the Governor of the Reserve Bank to exercise its "...extensive powers" under the Payment Systems (Regulation) Act 1998 and Reserve Bank Act (1959), Part II, Section 10 ''Functions of Reserve Bank Board" to "gather information from payment system participants and operators" by requesting each of the Four Pillars to provide (to the Reserve Bank) data of their combined Credit Card Products for the financial year ended 30 June 2016 which enables the Reserve Bank to present to the Australian Parliament by 30 June 2017 an annual written Statement on the Conduct of Monetary Policy which, amongst other things, reports on the aggregate Profitability of Credit Card Operations of the Four Pillars that -

(i)         provides same style 'pie charts' for "Card Issuers' Revenue" [that quantifies at least seven revenue sources] and "Card Issuers' Costs" [that quantifies at least five costs, which include Rewards Programs] that is displayed in in Chapter 8;

(ii)        informs the annual cost of Rewards Programme and the contribution to this annual cost from Interchange Fees; and

(iii)       certifies that Visa and MasterCard separately complied with the two weighted-average benchmarks set out in (i)(A) and (i)(B) above during the previous four quarterly reporting periods?

Will the Federal Treasurer direct the Governor of the Reserve Bank to request the CEO's of the Four Pillars to ensure that the Four Pillars, in particular their respective Credit Card divisions do not communicate with the other Three Pillars regarding the financial information requested in this question?

 

Grounds for Question 9

Chapter 8 notes that U.S. Federal Reserve has provided an annual written report to the U.S. Congress on the Profitability of Credit Card Operations of "large U.S. Credit Card banks" for the last 26 years.

"Section 8 of the U.S. Fair Credit and Charge Card Disclosure Act of 1988 directs the U.S. Federal Reserve Board to transmit annually to the U.S. Congress a written report about the profitability of credit card operations of depository institutions."  In August 2016 the Board of Governors of the Federal Reserve System presented its 26th "Report to the Congress on the Profitability of Credit Card Operations of Depository Institutions" to the U.S. Congress.

The Reserve Bank's webpage "Accountability" provides a section titled 'Accountability to Parliament' which notes that the Governor has provided to the Commonwealth Parliament a Statement on the Conduct of Monetary Policy every few years since 1996.

Chapter 9 notes "The Payment Systems (Regulation) Act 1998 gives the Reserve Bank of Australia 'extensive powers' to gather information from a payment system or from individual participants."