WASHINGTON–The Defense Credit Union Council (DCUC) has sent separate letters to legislators in Alaska and Texas, respectively, warning them of the implications of legislation related to card interchange.
In both letters DCUC registered its “strong opposition to proposals that would affect interchange.
In Texas, Senate Bill 2056, introduced by Sen. Kelly Hancock, along with its proposed floor amendment “reflects a fundamental misunderstanding of the credit card transaction process and could result in substantial, unintended consequences for smaller financial institutions,” DCUC noted.
What Would be Required
As currently drafted, the proposed amendment would require credit card issuers or networks to disclose specific swipe fee data to merchants.
“However, in practice, this information is typically provided by the merchant’s acquiring bank or payment processor—not the card issuer or network,” DCUC said. “SB 2056 fails to assign responsibility to these acquirers, creating both ambiguity and compliance burdens for institutions not equipped to meet the bill’s requirements.
By applying mandates based solely on issuer size, DCUC told the Texas legislature the bill inadvertently extends its reach to community-based credit unions involved in merchant acquiring activities— contradicting its stated intent to exempt smaller institutions.
DCUC further argued that SB 2056 introduces state-specific mandates in an area governed by uniform national standards, increasing compliance complexity and risk across the payments ecosystem.
The Defense Council said the legislation would be harmful to the many military personnel in Texas.
Pushback in Frontier State
The DCUC has also sent a letter to Alaska’s legislature expressing its “strong opposition” to the inclusion of interchange language from HB 171 into SB 79.
“While we understand the desire to address payment systems and transparency, the proposed interchange provision threatens to impose serious harm on credit unions, small financial institutions, and the very consumers it claims to help—particularly those who serve our nation in uniform,” DCUC said. “This legislation would effectively mirror the failed federal Durbin Amendment experiment, the consequences of which have been well-documented: higher costs for consumers, the elimination of rewards programs, reduced access to affordable credit, and a profound disruption to low-cost debit card services that many Alaskans rely on.”
‘Retailers Pocket the Savings’
DCUC told Alaska’s legislation that while federal legislation was enacted in 2010 with a promise of lowering costs for consumers, “nearly every reputable economic study has shown that retailers pocketed the savings while consumers lost access to benefits. A 2023 report found that Durbin’s price controls led to a $106 drop in average annual debit card benefits for consumers. Meanwhile, financial institutions faced a multibillion-dollar revenue reduction, cutting back on free checking and affordable accounts—especially in rural and underserved communities.”
The Defense Council said cutting interchange and the income it represents would undermine financial readiness in a state that has a significant military presence.
“At a time when military families are already struggling with high inflation and housing shortages, Alaska should be looking to expand financial access and protection, not restrict it,” the letter states.
