The American Bankers Association and 52 state banking associations today expressed strong opposition to the Durbin-Marshall Credit Card Mandate, also known as the Credit Card Competition Act. In a joint letter to Congress, the associations addressed how the proposal would harm consumers, small businesses and banks of all sizes.
The legislation would reduce card choice, increase fraud risks, reduce rewards, increase the cost of allocating credit to borrowers, and create economic challenges for smaller financial institutions, the banking groups wrote.
The associations noted that nearly 15 years of data demonstrates that the original Durbin amendment did not deliver the promised consumer benefits, adding that expanding a “failed framework” to credit cards would “produce similar outcomes, impose new regulations on credit card interchange fees and lead to similar consumer harm.” The letter also outlined how the legislation would limit credit access and “upend” credit card rewards programs, “which are funded through interchange fees, with the worst effects being felt by minority and lower-income consumers.” Independent analysis found the CCCA could cost the U.S. economy $228 billion and 156,000 jobs by eliminating rewards programs supporting travel and tourism.
According to the associations, “the CCCA will not increase competition in the credit card marketplace, but it will benefit corporate megastores at the expense of consumers, community financial institutions and smaller neighborhood retail merchants.” The groups also addressed fraud risk, warning that the CCCA would “enable a large increase in fraudulent card activity” and reduce funding used to “invest in fraud prevention and other credit card security features” that protect consumers and small businesses.
