Berger to Senate: Credit Card Competition Act has harmful implications for CUs
In a letter to the Senate sent Friday, NAFCU President and CEO Dan Berger voiced opposition for the Credit Card Competition Act and outlined the negative impacts of imposing any new caps or restrictions on interchange fees.
“We have seen the negative impacts of government intervention in the payments space already through Section 1075 of the [Dodd-Frank Act],” explained Berger. “This section, commonly referred to as the Durbin Amendment, imposed a cap on debit interchange fees for covered banks and credit unions, defined as those with assets of more than $10 billion, and established new routing network requirements for debit cards.” The new legislation, introduced by Sens. Dick Durbin, D-Ill., and Roger Marshall, R-Kansas, last week aims to expand this amendment further, adding to the interchange price controls by creating a new credit card routing mandate for institutions over $100 billion in assets.
“The Credit Card Competition Act of 2022 is not about competition,” wrote Berger. “It is about increasing the profits of big box retailers at the expense of consumers and financial institutions by creating government intervention in a free market and establishing a back-door price control on the credit card system.”
Berger noted requirements in the legislation for multiple networks on credit cards would lead to consumers losing autonomy when choosing credit cards, as big box retailers would be able to pick which network will process transactions and go with the cheapest – and potentially less secure – option.
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