Government intervention in the U.S. credit card market would harm consumers, small businesses and community-based financial institutions by reducing choice, increasing costs and fraud risks, and creating economic challenges for smaller institutions, the American Bankers Association and 10 financial sector associations said today in a joint letter to Congress.
The Credit Card Competition Act by Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) would impose new network routing mandates on financial institutions that issue credit cards. The lawmakers have introduced the bill multiple times in recent years, only for it to be shot down. Earlier this month, President Trump expressed support for the legislation in a post on Truth Social.
In the letter, the associations highlighted several key concerns:
- Research shows the Durbin-Marshall bill would primarily benefit the largest retailers, leaving small businesses at a competitive disadvantage. Studies estimate that nearly all savings would accrue to merchants with over $500 million in annual sales, while small businesses could lose up to $1 billion in rewards and face reduced access to $700 billion in revolving credit lines.
- Community-based financial institutions, which provide billions in loans and essential services, would be impaired by backdoor price controls on credit routing. Federal Reserve data confirms that similar measures under the Durbin amendment harmed exempted institutions, reducing revenue for lending and data security while increasing operational costs.
- The bill would diminish access to affordable credit, particularly for low-income consumers, and eliminate popular rewards programs. Studies show 77% of cardholders earning less than $50,000 rely on rewards cards. Evidence also indicates retailers are unlikely to pass savings to consumers, with 98% raising or maintaining prices after the original Durbin amendment.
The letter also notes that the U.S. payments ecosystem is already highly competitive, offering numerous options from credit and debit cards to real-time payments and digital wallets.
