Earlier the Department of Transportation’s Advisory Committee on Consumer Protections met on loyalty programs — discussing issues like whether DOT ought to require a minimum percentage of seats be available on a given flight, and whether changes in frequent flyer programs should require a certain amount of advance notice to members.
I haven’t heard anyone working in airline loyalty that’s concerned the DOT will take meaningful action here. The DOT simply hasn’t ever regulated frequent flyer programs. To enter this arena would almost certainly require a formal rulemaking process that would go on a minimum of 18 months. They won’t get anything done here during the current administration.
What does have some concerned is possible action by the Consumer Financial Protection Bureau. They regulate financial products, including credit cards, and loyalty co-brand credit cards. The CFPB could require that points earned via credit cards have various characteristics. And just as CFPB forbids changes to pricing (annual fee, interest rates) within a year of card signup, they could impose rules about changes to the value of points earned on cards without a certain amount of notice.
And existing agency leadership are incentivized to push through their priorities quickly, and their internal processes allow them to do so with greater flexibility than DOT’s.
In a world where Hillary Clinton doesn’t succeed Barak Obama as President, the CFPB changes markedly. So, like the EPA, agency leadership wants to push through as much of their agenda as quickly as they can to hedge against that risk. While I’m skeptical that loyalty points rewarded by banks (whether through their own proprietary programs or in conjunction with co-brand partners) are such a priority, more than one industry executive and consultant is staying up at night worrying that it is.
I rate this a long shot, but not p=0.