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Home » Interchange bill prioritizes large retailers over consumers
Policy & Issues

Interchange bill prioritizes large retailers over consumers

September 27, 2022
Reg Z and floor rates on open-end loans

CUNA joined other financial services organizations in a letter to House leadership highlighting strong opposition to the interchange bill from Reps. Lance Gooden, R-Texas, and Peter Welch, D-Vt. The organizations warn warning the bill would reduce access to credit, increase security risks associated with credit card use, and limit credit card rewards programs.

“Quite simply, credit cards make life work. Consumers have come to rely on their credit card of choice to pay for gas, groceries, and unexpected emergencies. This is especially true as consumers leverage their credit card rewards to deal with rising costs,” the organizations said in a joint statement.

“It’s disappointing that the Gooden-Welch bill prioritizes big box retailers’ profits over consumers at a time when consumers can least afford it. The Gooden-Welch bill would allow merchants to choose the cheapest routing networks – which may not offer the same robust, security as trusted, established payment networks. This creates additional risks for financial services providers that are extending credit to consumers for everyday purchases, big and small.

“That’s an important distinction that retailers are trying to overlook; financial institutions cover the costs for replacement cards and fraudulent purchases, making them more sensitive to changes in the payments system than merchants.

“We are particularly concerned that changes to the current routing system would disproportionately harm credit unions and community banks that serve underbanked areas. We’ve witnessed how the 2010 Durbin Amendment, which was adopted as part of the Dodd-Frank Act, capped debit card fees, leading to a decrease in free checking accounts and low-cost banking services for consumers. We are determined not to repeat the past – and, as such, we oppose the Gooden-Welch bill.”

KEYWORDS interchange
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