Capital Corner: Pleasant surprises

In politics, surprises are rarely good news. But now, as 2024 starts to take shape, unexpected developments on a couple of key issues show potential to help credit unions advance our agenda on Capitol Hill.

What does a “game changer” look like on Capitol Hill? When it comes to the Credit Card Competition Act, (“the Durbin Bill”), a huge merger in the credit card space has the potential to reshuffle the political deck on this stalemated bill.

Capital One’s proposed purchase of Discover, if approved, would alter the credit card landscape by adding a third major option for transactions. That, in turn, deprives Senator Durbin (D-IL) and his allies of their major rationale for the legislation by upending the Visa/Mastercard “duopoly.” Capital One/Discover represents a new market-driven option, and that already may be having an impact on the debate—soon after the announced merger Senator Durbin told reporters he is now “open to changes” in CCCA.

There are no details yet on what those “changes” may be. And in an effort to jump start his stalled legislation, Durbin, chairman of the Senate Judiciary Committee, has scheduled a hearing on CCCA April 9, and is promising to summon the CEOs of both Visa and Mastercard to testify. Durbin is expected to also call a small merchant as a counterpoint to the mega-bank CEOs; the rumor on the Committee is that Durbin “is going to find a Mom and Pop store owner from Peoria” to sit next to the well-heeled credit card representatives as a way to create a “David and Goliath” image during the hearing. In other words, the fight wears on.

 

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