Senator Durbin has proposed new legislation that could significantly transform the points and miles landscape.

A major overhaul may be on the horizon for the points and miles sector.

Senator Richard Durbin, a Democrat from Illinois and the key author of the Credit Card Competition Act aimed at reducing swipe fees among credit card companies, introduced new legislation on Thursday to enhance transparency in frequent flyer and cobranded credit card programs.

He is urging Congress to pass his latest initiative, the Protect Your Points Act.

If enacted as intended, this legislation could revolutionize frequent flyer programs, where millions of Americans earn rewards through flying, credit card usage, and more. Durbin aims to implement changes such as eliminating expiration dates on points and miles and mandating that airlines allow passengers to combine rewards and cash for airfare and other expenses.

According to a press release from the senator, the proposed legislation would impose regulations on how airlines manage frequent flyer programs by:

• Mandating that airlines announce any changes to the terms of frequent flyer programs and cobranded credit cards at least one year prior
• Requiring airlines to display the monetary value of points and miles within 90 days of the law's enactment, with real-time updates
• Obligating airlines to show airfare and additional costs in both cash and points/miles values
• Ensuring that points and miles remain valid indefinitely without expiration
• Permitting travelers to use a combination of points and cash to pay for airfare and extra services
• Allowing travelers to transfer points (at no cost) to family members or others in the same frequent flyer program
• Enabling unlimited point and mile transfers to another traveler’s account while keeping their value intact

The responsibilities outlined in the bill would fall under the U.S. Department of Transportation and the Consumer Financial Protection Bureau. As stated in the bill, applicable add-on services include fees for seats, baggage, early boarding, lounge access, and inflight Wi-Fi, among others.

The legislation aligns closely with concerns raised by Transportation Secretary Pete Buttigieg, as the Department of Transportation launched an investigation into the four largest domestic airlines earlier in September.

"These programs can significantly influence how customers engage with airlines, and many Americans reportedly have point balances that are substantial enough to be considered part of their savings," Buttigieg stated in a letter to American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.

Airlines for America, a trade organization representing major U.S. airlines, including the four mentioned in Buttigieg's letter, provided the following response to the bill.

"U.S. airlines have been advocating for the protection of our loyalty programs for years against efforts to abolish them," Airlines for America told TPG in a statement. "U.S. airlines maintain transparency regarding these programs, and lawmakers should acknowledge their popularity while ensuring that unnecessary regulations do not jeopardize them."

When asked how this legislation corresponds with the objectives of the Credit Card Competition Act, a spokesperson for Durbin replied, "These two bills address different issues – one focuses on enhancing disclosures and consumer protections in airline rewards programs, while the other aims to foster competition in the credit card market, potentially saving consumers billions in swipe fees each year."

Critics of the CCCA caution that capping interchange fees could negatively affect credit card companies that depend on these fees for revenue, potentially putting the future of airline and hotel loyalty programs at risk.

As of September 26, Durbin has put forward the Protect Your Points Act, although it has yet to appear as an officially introduced bill on Congress.gov.

Representatives from the DOT and the CFPB have not replied to requests for comments.