More than 140 organizations recently expressed their opposition to a bill introduced in the US Senate that aims to strengthen competition in the market for credit card networks.
The Credit Card Competition Act, introduced by U.S. Senators Dick Durbin (D-IL) and Roger Marshall, MD (R-KS), would direct the Federal Reserve to ensure that banks that issue credit cards credit offer a choice of at least two networks. on which an electronic credit transaction can be processed, with certain exceptions.
The Electronic Payments Coalition (EPC) is among about 140 groups opposing the measure.
“More than 140 organizations agree that the proposed credit card routing mandates included in the Credit Card Competition Act are bad for consumers, small businesses and financial institutions of all sizes. This bill is a cynical attempt to enrich big box retailers at the expense of everyone else. We know not a penny of savings will be passed on to consumers because we’ve seen this story before. The last time Congress passed trading regulations, 98% of retailers either failed to lower prices or raised prices while enjoying a multi-billion dollar bargain. Small banks and consumers are going to be the biggest losers, where the cost of banking will rise, popular cashback and rewards programs will disappear, fraud is likely to explode, and millions of Americans could lose their lives altogether. ‘access to credit,’ Jeff Tassey, chairman of the EPC board, said.
The Credit Union National Association (CUNA) and the National Association of Federally-Insured Credit Unions (NAFCU) are also among those against the bill.
“NAFCU fervently opposes Senators Durbin and Marshall’s Credit Card Competition Act of 2022, which only line the pockets of big-box retailers at the expense of consumers trying to make ends meet” , said NAFCU President and CEO Dan Berger. “This unhealthy legislation fails to recognize the strong competition that exists within the payment network. Without a modicum of consideration for the overwhelming risk of untested networks, the loss of safe and affordable banking products, and the higher cost of credit it would pass on to consumers and financial institutions, it is obvious that this bill does not is just bad policy. NAFCU and its members will work hard to stop this legislation in its tracks.
Jim Nussle, president and CEO of CUNA, agreed.
“The so-called Credit Card Competition Act is nothing more than a massive financial windfall for big-box retailers at the expense of consumers,” Nussle said. “CUNA, the leagues and credit unions will fight against any legislative changes to how credit and debit cards currently operate.”
The 140 groups opposed to the bill represent banks, credit unions, merchants and consumers.