Overview

Title

To amend the Federal Election Campaign Act of 1971 to require the disclosure of the card verification value as a condition of the acceptance of online contributions made through the use of credit or debit cards in elections for Federal office and to prohibit the acceptance of contributions made through the use of gift cards and prepaid credit cards in such elections, and for other purposes.

ELI5 AI

H.R. 9488 wants to make sure that when people send money to help in political campaigns online, they use safe and traceable ways, like real credit or debit cards, and not gift cards, so that everything is fair and clear.

Summary AI

H. R. 9488, also known as the "SHIELD Act," aims to amend the Federal Election Campaign Act of 1971 to enhance the security and transparency of online campaign contributions. It requires the disclosure of the card verification value for credit or debit card donations and mandates that the billing address be within the U.S. or that the donor provides certain documentation if residing abroad. Additionally, the bill bans contributions made with gift cards and prepaid credit cards, and prohibits assisting someone in making a donation under another's name. The Federal Election Commission is tasked with implementing regulations alongside consulting with credit card networks to ensure compliance.

Published

2024-09-20
Congress: 118
Session: 2
Chamber: HOUSE
Status: Reported in House
Date: 2024-09-20
Package ID: BILLS-118hr9488rh

Bill Statistics

Size

Sections:
5
Words:
1,487
Pages:
8
Sentences:
26

Language

Nouns: 467
Verbs: 116
Adjectives: 56
Adverbs: 8
Numbers: 64
Entities: 68

Complexity

Average Token Length:
4.23
Average Sentence Length:
57.19
Token Entropy:
4.90
Readability (ARI):
30.72

AnalysisAI

General Summary of the Bill

The proposed legislation, referred to as the "Secure Handling of Internet Electronic Donations Act" or "SHIELD Act", seeks to tighten the regulations around online contributions in federal elections. The bill aims to enhance transparency and security by requiring individuals making contributions via credit or debit cards to disclose the card verification value. It restricts the use of gift cards and prepaid cards for political donations and prohibits contributions made under someone else’s name. The act also mandates the Federal Election Commission (FEC) to establish regulations within a short timeframe to ensure compliance with these new rules.

Summary of Significant Issues

There are several notable issues within the legislation:

  1. Privacy and Data Security Concerns: The requirement for contributors to disclose sensitive information, such as card verification values and potentially passport details, raises significant privacy and data security issues.

  2. Vague Terms and Loopholes: The bill's use of the phrase "best efforts" is not clearly defined, leaving room for varying interpretations and potential loopholes, which may undermine the effectiveness of its provisions.

  3. Lack of Enforcement Mechanisms: The bill does not specify enforcement measures or penalties for non-compliance, especially concerning the prohibition of contributions made using gift cards and making contributions in another's name.

  4. Implementation Challenges: The timeline given to the FEC for creating new regulations is notably tight, potentially leading to inadequately developed rules.

  5. Potential Bias and Exclusion: The consultation with credit card payment networks in formulating regulations may inadvertently prioritize their interests over those of consumer protection groups. Furthermore, specific identification requirements for donors living abroad might exclude individuals unable to meet these criteria.

Public Impact

The bill aims to enhance the transparency and security of online donations in federal elections, a move that could increase public confidence in the electoral process. By restricting the use of potentially untraceable funds like those from prepaid cards and ensuring that contributions are made by identifiable individuals, the bill offers a more accountable donation landscape.

However, the requirement for detailed personal information and card verification values may deter some from making online contributions due to privacy concerns. Furthermore, those living abroad might find it challenging to comply with the specific ID requirements, potentially limiting their participation in the electoral process.

Impact on Stakeholders

Political Committees: The bill would impose new procedural obligations on political committees, including the need to verify personal and card information. This could increase administrative burdens and associated costs.

Contributors: Online donors might face more barriers due to the increased documentation and disclosure requirements, which could discourage contributions. Privacy-conscious individuals may particularly be affected.

Regulatory Bodies: The Federal Election Commission is tasked with rapidly developing and implementing new regulations, a requirement that may strain its resources and capacity for thorough rulemaking.

Payment Networks: Credit card companies and payment networks may see increased collaboration with the FEC, providing them some influence over the new regulations' development. However, this might raise concerns about fairness, as input from other stakeholders could be insufficiently considered.

Overall, while the SHIELD Act seeks to bolster trust in federal election funding by heightening transparency, it presents challenges related to data security, enforceability, and stakeholder equity that warrant careful consideration and potential adjustments.

Issues

  • The requirement for disclosure of card verification value and identification documents raises significant privacy and data security concerns. This could be potentially problematic given the sensitive nature of such information. (Section 2)

  • The vague language around the term 'best efforts' could lead to inconsistent application and potential loopholes, undermining the effectiveness of the bill’s provisions. This lack of specificity is relevant in both the requirement for credit/debit card contributions and the prohibition of gift card contributions. (Sections 2 and 3)

  • The lack of enforcement mechanisms or penalties for non-compliance with the prohibition on accepting contributions made using gift cards might hinder the effectiveness of the prohibition. Without specific penalties, political committees might not take this requirement seriously, reducing the bill's impact. (Section 3)

  • The bill does not address who is responsible for enforcement or penalties for violations related to aiding or abetting contributions made in the name of another, raising concerns about implementation and effectiveness. (Section 4)

  • The short deadline of 10 days for the Federal Election Commission to promulgate regulations may be insufficient for thorough consideration and effective implementation of necessary regulations. This rushed timeline could lead to poorly developed rules that fail to address key issues adequately. (Section 5)

  • Consultation with credit card payment networks as part of the regulatory process might favor these entities at the expense of consumer protection groups or smaller payment processors, raising fairness concerns regarding stakeholder input. (Section 5)

  • The bill’s specificity about what constitutes an acceptable identification document for contributions made by individuals living abroad could exclude some individuals unable to meet these documentation requirements, raising concerns about inclusivity and access. (Section 2)

Sections

Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.

1. Short title Read Opens in new tab

Summary AI

The act described in this section is called the "Secure Handling of Internet Electronic Donations Act" or "SHIELD Act".

2. Requiring disclosure of card verification value as condition of acceptance of online contributions made using credit or debit cards in Federal elections Read Opens in new tab

Summary AI

The bill requires that for any online contributions made via credit or debit cards to political committees during U.S. federal elections, the donor must provide their card's verification value and prove their U.S. address or citizenship status if they reside abroad. It also mandates that the details of such contributions be recorded and reported timely by the political committee's treasurer.

3. Prohibiting acceptance of contributions made using gift cards in Federal elections Read Opens in new tab

Summary AI

The section prohibits political committees from accepting contributions made with prepaid cards, gift certificates, or store gift cards in federal elections. It also states that political committees are considered compliant if they make their best efforts to follow this rule, and the rule applies to contributions reported after the new law is enacted.

4. Prohibiting aiding or abetting making of contribution in the name of another Read Opens in new tab

Summary AI

The text adds a new rule to the Federal Election Campaign Act, stating that no one is allowed to help someone else make a campaign donation using someone else's name.

5. Regulations Read Opens in new tab

Summary AI

The section requires the Federal Election Commission to create rules within 10 days to implement changes made by this Act. Additionally, the Commission must work with credit card payment networks to develop these rules, following certain legal definitions.