Any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market would harm small businesses and consumers across the country, the American Bankers Association and seven bank and credit union associations said in a joint letter to the Senate Judiciary Committee, which will hold a hearing on the issue Tuesday.
In the letter, the associations expressed their strong opposition to the Credit Card Competition Act, a retailer-backed bill that would impose network routing requirements on banks that issue credit cards, and any attempt to expand the Durbin amendment. The groups also expressed disappointment with the committee’s decision to hold the hearing during the lame-duck session of Congress and not invite testimony from community banks or credit unions harmed by the proposal. Committee Chair Dick Durbin (D-Ill.) is co-sponsor of the Credit Card Competition Act along with Sen. Roger Marshall (R-Iowa).
The negative repercussions of the Durbin amendment are still being felt nearly 15 years after it was signed into law,” the groups wrote. “A 2022 report from the Government Accountability Office found that if the Durbin amendment ‘had not been implemented, 65% of noninterest checking accounts offered by covered banks would have been free.’”
The groups said that imposing regulations on credit card interchange fees will lead to similar consumer harm, citing recent research that estimates the Durbin-Marshall bill would raise the cost of checking account services to consumers by $1.3 to $2 billion a year. They also noted the bill will “open the door to fraud, hamper rewards programs, and limit the allocation of credit to individuals and small businesses.”
The letter also highlighted survey data that shows U.S. consumers value their cards and oppose the federal government reaching into their wallets.
