A proposed bill that would impose routing requirements on banks that issue credit cards is an anti-consumer, anti-competitive and cynical attempt by the largest global merchants and biggest grocery chains to obtain a subsidy for themselves, the American Bankers Association and 49 state bankers associations said today in a letter to House and Senate leaders.
The Credit Card Competition Act was introduced by Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) in the Senate and by Reps. Lance Gooden (R-Texas) and Zoe Lofgren (D-Calif.) in the House. In their letter, the associations said the bill was written to deliver a major payday for big retail and big grocery at a time when giant retailers have been getting even bigger. They also said not to be fooled by claims the legislation would exempt community banks or help small businesses, as the same claims were made a decade earlier during the Durbin Amendment debate, “yet small, ‘exempt’ banks saw a quarter of their debit card revenue disappear and fraud costs increased after it became law.”
“The impacts of this bill are clear: fewer choices for consumers, increased threats to consumer data and privacy, weakened local banks and credit unions, and the disappearance of card rewards programs that families of all income levels use to stretch their budgets,” the associations said.
