WASHINGTON– Credit unions have found themselves again issuing warnings over a piece of legislation they had hoped was fading in the rearview mirror, in this case, the Credit Card Competition Act.
The legislation has moved back to the forefront following a post on Truth Social in which President Trump stated, “Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff. Roger is a FANTASTIC Senator!!!”
As the CU Daily had reported earlier, credit unions, including the Defense Credit Union Council, began expressing concerns over the weekend that the president’s social media post calling for a 10% cap on credit card APRs could breathe new life into the Credit Card Competition Act, which is strongly opposed by credit unions, financial institutions and card issuers, and just as strongly supported by the nation’s retailers.
Marshall had earlier stated in a tweet following Trump’s announcement that he was ready to lead the charge on legislation.
The CCCA died in the last session of Congress. It has been co-sponsored by Sen. Richard Durbin (D-IL), author of the so-called Durbin Amendment, which caps fees on debit card transactions for institutions of more than $10 billion in assets.
What CCCA Would Do
The Credit Card Competition Act seeks to require large institutions to give merchants a choice of at least two different payment networks, meaning not just Visa or Mastercard, to process electronic credit-card transactions, and aims to break up that duopoly and lower “swipe” or interchange fees that merchants pay. Marshall, Durbin and retailers have said the legislation would reduce costs for small businesses and consumers, while credit unions and other issuers have suggested it might reduce rewards programs, complicate security, and impact smaller Fis’ ability to lend.
America’s Credit Unions Responds
“America’s Credit Unions has long opposed the Credit Card Competition Act because it would disrupt a secure and competitive credit card system in ways that hurt consumers and small financial institutions, while benefiting Big Box retailers,” America’s Credit Unions President and CEO Scott Simpson said in a statement. “The bill’s routing mandates will ultimately lead to increased fraud, reduced card rewards, and limited access to affordable credit for millions of credit union members. There’s no evidence this proposal would lower prices for consumers, but there is evidence this will benefit the largest retailers in the United States. The real risk is that it would weaken the payments system people rely on every day. Credit unions urge lawmakers to reject this approach and focus on policies that support a strong payments system while protecting consumers and financial choice.”
