With Congress currently in a lame duck session, America’s Credit Unions has expressed concern about renewed interest in picking up the Credit Card Competition Act.
The bill, most recently introduced in January of this year, would strive to increase competition between credit card networks first, by requiring large financial institutions to offer more than one payment network on their credit cards and second, by lowering interchange fees, allowing merchants to choose the network that best suits them.
The bill was read twice and referred to the Senate Committee on Banking, Housing, and Urban Affairs. Ultimately, though, the Act failed to gain momentum and remains stalled. However, supporters of the bill are now urging Congress to take action during the lame duck session, before the new members are sworn in come January.
Since its introduction, America’s Credit Unions has opposed the legislation, claiming it would “disrupt a secure and competitive credit card system without making life more affordable.” Now, with Congress eyeing the bill again, ACU has recommitted advocacy efforts to prevent its passing. The Electronic Payments Coalition (EPC), of which ACU is a member, has launched a new campaign against the Credit Card Competition Act.
The EPC states that”despite billions of dollars in reduced debit card costs for retailers since Durbin’s enactment, they largely failed to lower prices, instead retaining the savings while consumers continued to face higher costs.” The EPC also claims “history should serve as a cautionary tale as Congress considers new credit card routing mandates,” and warns that “expanded interchange regulations would come at the expense of community financial institutions, potentially reducing resources that credit unions use to protect members from fraud, invest in payment security, and provide competitive products and services.”
Updates on the legislation should be coming soon, as Congress will need to act quickly if it truly plans to pass the bill during this session, given that there are less than two months before new members are sworn in.
