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America’s credit unions and their more than 135 million members vehemently oppose the Credit Card Competition Act, CUNA Deputy Chief Advocacy Officer Jason Stverak wrote to all members of Congress Friday. CUNA and Leagues have issued an action alert for stakeholders to send messages of opposition to the bill, which would impose new credit routing mandates..
“These bills are nothing more than the largest retailers asking Congress to extend a failed government regulation to credit cards. All in an effort to limit their costs and add to the growth they have achieved on the backs of small businesses and consumers during the pandemic. And just like the debit card interchange legislation passed in 2010, any so-called “exemptions” for smaller financial institutions won’t work. The proposed changes to the credit card system threaten consumer data security and privacy as well as the availability of much needed credit for consumers.
Stverak also noted that “interchange is the cost of doing business in the 21st century,” and urged all members to oppose the House and Senate versions of the bill.
“Interchange is the cost of accepting credit cards. Do the retailers, grocers and convenience stores really want to go back to only accepting cash and checks? I doubt it,” Stverak wrote. Like electricity, accepting credit cards comes with a cost. Also, like electricity, accepting credit cards is (likely) essential to a successful business.
“Why does interchange cost money? Interchange fees help defray (but do not completely cover) the cost of fraud detection, credit monitoring and fraudulent purchase protection that makes consumers and merchants whole when bad actors attack, plus a long list of other costs related to operating a secure credit card program,” he added.