WASHINGTON–The credit union trade groups are issuing warnings and concerns after the Credit Card Competition Act was added as an amendment to the Senate Agriculture Committee’s cryptocurrency bill.
The CCCA, which would cap credit card interchange for financial institutions with more than $100 billion in assets, is strongly opposed by credit unions and other financial institutions and their trade groups, while it has equally strong support from the nation’s retailers.
It is sponsored by Sen. Roger Marshall (R-KS), Sen. Richard Durbin (D-IL) and Sen. Peter Welch (D-VT).
The legislation had been left for dead after stalling in the prior Congress, but it got new life after President Trump expressed support for it in a social media post last week in which he said, “Everyone should get behind Senator Roger Marshall’s Credit Card Competition Act , in order to stop the out of control Swipe Fee ripoff….”
Legislation such as the CCCA, as well as proposals such as Trump’s call for a 10% APR cap on credit cards, are getting new attention in an election year as politicians seek to show they are concerned about “affordability.” Credit unions and other financial trade groups have challenged the claim the legislation will help lower prices, saying it will only enrich “big box” stores.
‘Hurt Consumers’
“Attempting to attach the Credit Card Competition Act language to a cryptocurrency bill does not change the underlying facts,” said America’s Credit Unions President and CEO Scott Simpson in a statement. “This proposal would still disrupt a secure and well-functioning credit card system in ways that hurt consumers and small financial institutions while delivering a windfall to the largest retailers in the country. Forcing routing mandates into the payments system increases fraud risk, weakens consumer protections, and ultimately limits access to affordable credit for millions of credit union members. Lawmakers should reject efforts to revive this flawed policy and not support any amendments related to credit card mandates.”
Nothing to Do With Digital Assets’
Similarly, the Defense Credit Union Council has objected to the amendment.
“DCUC strongly opposes any effort by Senators Dick Durbin, Roger Marshall, and Peter Welch to attach the Durbin–Marshall Credit Card Competition Act to the Senate Agriculture Committee’s digital assets market-structure markup,” DCUC said in a statement. “This proposal has nothing to do with digital asset policy and has never been considered through regular order in the Senate Banking Committee, where issues of payments, interchange, and consumer credit properly belong.”
DCUC said using digital asset legislation as a vehicle for sweeping payments reform undermines transparency and bypasses appropriate congressional scrutiny.
“Using a bipartisan digital assets framework as a vehicle to advance a sweeping and highly controversial overhaul of the U.S. payments system is a backdoor maneuver that undermines the integrity of the legislative process,” the Defense Council said.
‘Repeatedly Failed’
DCUC argued that government-mandated interchange changes have repeatedly failed to deliver promised benefits to consumers.
“DCUC has been clear and consistent: government-mandated interchange changes do not benefit consumers,” said DCUC Chief Advocacy Officer Jason Stverak in a statement. “The experience of prior interchange mandates shows that promised savings do not flow to cardholders, while financial institutions such as credit unions lose critical revenue used to fund fraud prevention, cybersecurity investments, rewards programs, and member services.”
According to DCUC, the consequences would be especially harmful for military families, young servicemembers, and veterans.
“For military families, young servicemembers, and veterans, the result is reduced access to safe, affordable credit and weaker protections against fraud and abuse,” DCUC warns.
‘Uncertainty’
“If adopted, the Durbin–Marshall proposal would inject uncertainty into the payments ecosystem, increase fraud risk, and weaken consumer confidence, all while delivering a windfall to large retailers at the expense of everyday Americans. Major policy changes of this magnitude should be debated transparently, on their own merits, and within the committees of jurisdiction, not attached to unrelated legislation in an effort to bypass scrutiny.”
DCUC urged Senate leadership to keep the digital assets markup narrowly focused and reject any attempt to fold unrelated interchange mandates into the process.
