As consumers already face financial hardships due to high inflation, a new legislative proposal giving merchants broad say over which credit card routing networks they use could drive up the cost of financial services, eliminate popular credit card rewards programs and introduce new security risks, Mississippi Bankers Association President and CEO Gordon Fellows wrote in a new op-ed last week in Y’all Politics, a Mississippi-based online publication.
The Credit Card Competition Act of 2022—an ABA-opposed bill that was introduced in the Senate by Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) and in the House by Peter Welch (D-Vt.) and Lance Gooden (R-Texas)—would create new credit card routing mandates that will affect banks that issue credit. The lawmakers in recent days have signaled that they may attempt to move the bill through as an amendment to a must-pass piece of legislation like the National Defense Authorization Act.
“If this proposal becomes law, it will force local banks in Mississippi to pay for the enormous cost of rewiring how credit cards are processed—and adding new costs during a period of such high inflation is going to continue to strain the finances of everyday Mississippians,” Fellows wrote. “In addition to adding costs, expanding the Durbin amendment will remove consumers’ ability to choose which credit card network to route transactions through and give that choice to big retailers instead. . . It won’t increase real competition, but it will hurt consumers, small businesses and community banks. Mississippians are already facing enough economic headwinds, now is not the time to expand this costly, failed policy.”