The American Bankers Association and 52 state bankers associations yesterday criticized the leaders of the Senate Judiciary Committee for failing to include any representatives from banks or credit card issuers during a hearing last month on credit card competition. “As a result, the committee and the public failed to receive testimony from a major group of U.S. market participants that is core to facilitating one of the most vibrant credit card markets in the world,” the groups said in a joint statement.
The Senate Judiciary Committee held a Nov. 19 hearing on credit interchange card fees and the retailer-backed Credit Card Competition Act, co-sponsored by committee Chair Richard Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.). While representatives from Visa and Mastercard testified at the hearing, the remaining witnesses represented merchants who have lobbied heavily for passage of the bill. In their letter, the associations noted that thousands of banks and credit unions issue credit cards, and their investments help maintain and upgrade global payment networks. Community banks also rely on interchange fees to pay for rewards programs and fraud protection, and to underwrite affordable lines of credit, they said.
“The payments system is critical infrastructure that fuels our economy — without it, commerce grinds to a halt,” the associations said. “We hope lawmakers recognize the enormous resources, investment and innovation it takes to make this system secure, ubiquitous and seamless for the parties involved in the transaction — consumers, merchants and banks.”
The associations also shared several points they would have raised had they been invited to testify, including that the credit card market is competitive, research shows merchants pocketed the savings after the creation of the debit card fee cap by the Durbin Amendment, interchange regulation has failed in other countries, and that payment cards do not contribute to inflation. “The lack of credit card issuer representation at the hearing was extremely disappointing and shows that the committee is not serious about working to improve the credit card market,” they said.
Editor’s note: This story has been updated to state that 52 state bankers associations signed the letter.
