A group of financial organizations including the American Bankers Association, Electronic Payments Coalition, Consumer Bankers Association, and others, sent a joint letter to U.S. Sen. Lindsey Graham and other members of the Senate Committee on the Judiciary in opposition of the proposed Credit Card Competition Act.
“Any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market would not only harm our members, but also small businesses and consumers across the country,” the organizations wrote in the joint letter. “To say that consumers will benefit from the Durbin-Marshall bill is inaccurate. A reduction in rewards and cash back opportunities would significantly harm minority and lower-income consumers.”
“The negative repercussions of the Durbin amendment are still being felt nearly 15 years after it was signed into law,” the letter read. “Imposing regulations on credit card interchange fees will lead to similar consumer harm.”
The letter, addressed to Senate Committee Chairman Richard Durbin as well as ranking member Lindsey Graham, expressed opposition to the Credit Card Competition Act, or S. 1838, also known as the Durbin-Marshall bill, as well as “disappointment” that the committee did not choose to have a credit union or similar organization testify at a recent hearing to inform legislators on the impacts of the proposed legislation.
The bill, originally sponsored by U.S. Sens. Richard Durbin (D-Ill.) and Roger Marshall (R-Kans.) would require banks to offer merchants at least two network options, one of which cannot be Visa or Mastercard, for processing credit card transactions. Opponents to the bill argue that if given the choice, retailers would likely choose cheaper, less secure networks for processing transactions, thereby exposing consumers to increased securities and fraud risks.
Survey data included in the letter suggests American consumers value their cards and oppose federal intervention in personal finances. The associations emphasized existing competition within various payment methods available today.
The groups cautioned against actions that might disrupt what they described as a “convenient, secure and hassle-free” payment system crucial for consumer protection against fraud and supporting economic activities across various platforms continuously throughout each year.
