WASHINGTON— America’s Credit Unions, the Defense Credit Union Council, and the Independent Community Bankers of America have sent a joint letter to Congress expressing strong opposition to the Durbin-Marshall credit card mandates, with the three groups warning the proposal would “harm consumers, small businesses, and community financial institutions while delivering a windfall to the nation’s largest retailers.”
“These misguided mandates would expand the failed Durbin routing requirements to credit cards, harming consumers, small businesses, and community financial institutions while delivering a windfall to corporate megastores,” the letter states.
In the letter the three organizations cite what they said is evidence from the original Durbin amendment that showsconsumers “did not see promised savings,” as well as studies on how the proposed Credit Card Competition Act could impact the economy.
The Evidence Cited
The trade groups said that evidence includes:
- A GAO report that shows, absent Durbin, 65% of noninterest checking accounts at covered banks would have been free. After the amendment took effect, 98% of merchants raised prices or kept them the same.
- 77% of cardholders earning under $50,000 carry a rewards card that could be jeopardized under the proposal.
- Oxford Economics estimates the Durbin-Marshall bill could cost the U.S. economy $228 billion and 156,000 jobs by undermining rewards programs that support travel and tourism.
- Federal Reserve data shows community financial institutions experienced a 30% drop in interchange revenue after the original Durbin amendment.
- A Texas A&M study that estimates the bill could double card fraud to $20 billion over the next decade while reducing the ability of financial institutions to invest in fraud prevention and data security.
Benefits to the ‘Megastores’
“In short, the Durbin-Marshall mandates would benefit corporate megastores at the expense of consumers, small businesses, and community financial institutions,” the letter concludes. “We urge Congress to reject this harmful amendment in any form.”
