Sens. Dick Durbin (D-IL.), Roger Marshall (R-Kan.), J.D. Vance (R-Ohio) and Peter Welch (D-Vt.) on June 7 introduced the Credit Card Competition Act (CCCA, S. 1838), which would require banks with more than $100 billion in assets to offer merchants at least two networks to process credit cards. Under terms of the bill, at least one of these payment rails could not be owned by Visa or Mastercard. A House companion bill, HR 3881 was introduced by Rep. Lance Gooden (R-TX).
DCUC and other credit union trades pushed back immediately, saying the bill would reduce consumer options on credit transactions, weaken cybersecurity protections, and eliminate funding for popular credit card rewards programs.
They also pointed out the promised consumer savings from the 2010 Durbin Amendment cap on debit transaction fees never materialized. This contention is backed up by a 2015 Richmond Federal Reserve study which found that 77.2% of merchants kept prices the same in the wake of the Durbin debit rules, 21.6% actually increased prices, and only 2.1% passed on lower debit costs to consumers.
Credit unions trades are part of the Electronic Payments Coalition, a financial services alliance formed to fight the retailer attempt to upend the payment system. The coalition is running a series of ads aimed at educating Congress on the issue, pointing out the failed track record of the previously mentioned 2010 Durbin debit card law and pushing back against inaccuracies in the current retailer campaign.
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